Background <p>In South Korea, the prognosis of avoidable hospitalization in diabetes has not been evaluated, even though the incidence rate is considerably high compared to the Organization for Economic Co-operation and Development average. This study investigated the association between diabetic avoidable hospitalization after the diagnosis of type 2 diabetes mellitus and short- and long-term all-cause mortality.</p> Methods <p>Participants were type 2 diabetes mellitus patients aged 60 years and older and gathered through the National Health Insurance Services Senior cohort data from 2008 to 2019. The outcome measures included five-year and overall period all-cause mortality. The main independent variable was the first-year experience of diabetic avoidable hospitalization after type 2 diabetes mellitus diagnosis. Regression analysis was performed using the Cox proportional hazard model. To enhance the robustness of the study results, a sensitivity analysis and inverse probability of treatment weighting method were conducted.</p> Results <p>Among 27 005 participants, 2099 (7.8%) died within five-year of type 2 diabetes mellitus diagnosis and 4693 (17.4%) died in the overall study period after type 2 diabetes mellitus diagnosis. Participants who experienced diabetic avoidable hospitalization one year after being diagnosed with type 2 diabetes mellitus had a higher risk of all-cause mortality compared to those who did not (inverse probability of treatment weighted, Five-year: hazard ratio 1.24, 95% confidence interval 1.14–1.36; Overall period: hazard ratio 1.41, 95% confidence interval 1.33–1.50).</p> Conclusions <p>Enhancing accessibility and quality of primary care to prevent avoidable hospitalization in older patients with type 2 diabetes mellitus is necessary.</p>