ABSTRACT: BACKGROUND:Optimal prescription of blood pressure, lipid, and glycaemic control treatments for adults with type 2 diabetes remains unclear. We aimed to compare the effectiveness and cost-effectiveness of two treatment approaches for diabetes management in five low-income and middle-income countries. METHODS:We developed a microsimulation model to compare a treat-to-target (TTT) strategy, aiming to achieve target levels of biomarkers (blood pressure <130/80 mm Hg, LDL <2·59 mmol/L, and HbA1c <7% [ie, 53·0 mmol/mol]), with a benefit-based tailored treatment (BTT) strategy, aiming to lower estimated risk for complications (to a 10 year cardiovascular risk <10% and lifetime microvascular risk <5%) on the basis of age, sex, and biomarker values. Data were obtained from cohorts in China, Ghana, India, Mexico, and South Africa to span a spectrum of risk profiles. FINDINGS:The TTT strategy recommended treatment to a larger number of people-who were generally at lower risk of diabetes complications-than the BTT. The BTT strategy recommended treatment to fewer people at higher risk. Compared with the TTT strategy, the BTT strategy would be expected to avert 24·4-30·5% more complications and be more cost-effective from a societal perspective (saving US$4·0-300·0 per disability-adjusted life-year averted in the countries simulated). Alternative treatment thresholds, matched by total cost or population size treated, did not change the comparative superiority of the BTT strategy, nor did titrating treatment using fasting plasma glucose (for areas without HbA1c testing). However, if insulin were unavailable, the BTT strategy would no longer be superior for preventing microvascular events and was superior only for preventing cardiovascular events. INTERPRETATION:A BTT strategy is more effective and cost-effective than a TTT strategy in low-income and middle-income countries for prevention of both cardiovascular and microvascular complications of type 2 diabetes. However, the superiority of the BTT strategy for averting microvascular complications is contingent on insulin availability. FUNDING:Rosenkranz Prize for Healthcare Research in Developing Countries and US National Institutes of Health (U54 MD010724, DP2 MD010478).