To build a tool to assess the management of inpatients with diabetes mellitus and to investigate its relationship, if any, with clinical outcomes. A total of 678 patients from different settings, Internal Medicine (IMU, n = 255), General Surgery (GSU, n = 230) and Intensive Care (ICU, n = 193) Units, were enrolled. A work-flow of clinical care of diabetes was created according to guidelines. The workflow was divided into five different domains: (a) initial assessment; (b) glucose monitoring; (c) medical therapy; (d) consultancies; (e) discharge. Each domain was assessed by a performance score (PS), computed as the sum of the scores achieved in a set of indicators of clinical appropriateness, management and patient empowerment. Appropriate glucose goals were included as intermediate phenotypes. Clinical outcomes included: hypoglycaemia, survival rate and clinical conditions at discharge. The total PS and those of initial assessment and glucose monitoring were significantly lower in GSU with respect to IMU and ICU (P < .0001). The glucose monitoring PS was associated with lower risk of hypoglycaemia (OR = 0.55; P < .0001), whereas both the PSs of glucose monitoring and medical therapy resulted associated with higher in-hospital survival only in the IMU ward (OR = 6.67 P = .001 and OR = 2.38 P = .03, respectively). Instrumental variable analysis with the aid of PS of glucose monitoring showed that hypoglycaemia may play a causal role in in-hospital mortality (P = .04). The quality of in-hospital care of diabetes may affect patient outcomes, including glucose control and the risk of hypoglycaemia, and through the latter it may influence the risk of in-hospital mortality.