Aims/hypothesis Epidemiological evidence shows an increasing prevalence of type 2 diabetes in Taiwan. The aim of this study was to assess the yearly incidence for this country during 1992-1996. Subjects and methods Data obtained by telephone interviews of 93,484 diagnosed diabetic patients enrolled in Taiwan's National Health Insurance programme formed the basis of this study. A total of 36,153 incident cases of type 2 diabetes (17,097 men and 19,056 women) were identified and incidence rates calculated. The trends of obesity and parental diabetes were also evaluated. Results The overall 5-year incidences for men and women were 187.1 and 218.4 per 100,000 population, respectively. The trends from 1992-1996 were increased for all age groups in men and for most age groups in women. A 2.8-fold increase in incidence was observed for the youngest age group (< 35 years), in which the increase in incidence was higher than in the older age groups. Men showed a higher fold increase in incidence than did women (3.5 vs 2.1). Obesity at interview increased from 39.2% in 1992 to 47.6% in 1996 (p < 0.001) and was significant for all ages. Parental diabetes showed no yearly change when all patients were analysed together, but there was a trend towards a decrease in the youngest age group (< 35 years) and a trend towards an increase in the oldest age groups (>= 55 years). Conclusions/interpretation An increasing incidence of diagnosed type 2 diabetes was observed for each sex in most age groups in Taiwan, but was most marked in the youngest age group. A parallel increase in obesity was observed with the increasing incidence of diabetes.