The objective of this study was to determine the impact of renal transplantation and hemodialysis treatment on outcome of elderly diabetic patients with end-stage renal disease (ESRD) among other factors related to survival. Results of treatment of ESRD in 78 patients with non-insulin-dependent diabetes mellitus (type 2) showed a survival rate of 58% at 1 year and 14% at 5 years, independent of treatment modality. Patients who received a renal allograft had a higher survival rate as compared with patients on hemodialysis treatment (5-year survival, 59% v 2%; P < 0.005). Diabetic patients with a history of myocardial infarction, stroke, or peripheral gangrene before onset of renal replacement therapy had a worse prognosis in comparison to patients without vascular complications (5-year survival, 2% v 21%; P < 0.05). Analysis of patients who survived less than 6 months and more than 24 months was performed. Long-term survivors were slightly younger, had diabetes for a shorter period, and showed a better metabolic control of diabetes mellitus. Sixteen long-term survivors received a renal allograft. In contrast, only three short-term survivors were transplanted. Furthermore, short-term survivors also had a greater than 70% incidence of severe vascular complications before renal replacement therapy. A history of myocardial infarction, stroke, or peripheral gangrene is an independent predictor of decreased survival, irrespective of whether the patients were transplanted or maintained on chronic hemodialysis treatment. In contrast, renal transplantation improved survival of elderly diabetic patients without vascular complications and should be the treatment of choice in this specific group of patients.