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The objective of this study was to evaluate indicators of diabetes quality of care for US nonelderly, adult Medicaid enrollees with type 2 diabetes and compare federally qualified health centers (FQHCs) versus non-FQHCs.We analyzed diabetes process measures and acute health services utilization with 2012 US fee-for-service and managed care Medicaid claims in all 50 states and DC. We compared FQHC (N=121,977) to non-FQHC patients (N=700,401) using propensity scores to balance covariates and generalized estimating equation models.Overall, laboratory-based process measures occurred more frequently (range, 65.7%-76.6%) than measures requiring specialty referrals (retinal examinations, 33.3%; diabetes education, 3.4%). Compared with non-FQHC patients, FQHC patients had about 3 percentage point lower rates of each process measure, except for higher rates of diabetes education [relative risk=1.09, 95% confidence interval (CI): 1.03-1.16]. FQHC patients had fewer overall [incident rate ratio (IRR)=0.87, 95% CI: 0.86-0.88] and diabetes-related hospitalizations (IRR=0.79, 95% CI: 0.77-0.81), but more overall (IRR=1.06, 95% CI: 1.05-1.07) and diabetes-related emergency department visits (IRR=1.10, 95% CI: 1.08-1.13).This national analysis identified opportunities to improve diabetes management among Medicaid enrollees with type 2 diabetes, especially for retinal examinations or diabetes education. Overall, we found slightly lower rates of most diabetes care process measures for FQHC patients versus non-FQHC patients. Despite having higher rates of emergency department visits, FQHC patients were significantly less likely to be hospitalized than non-FQHC patients. These findings emphasize the need to identify innovative, effective approaches to improve diabetes care for Medicaid enrollees, especially in FQHC settings.