Using real-world clinical data from the Indiana Network for Patient Care, we analyzed the associations between non-adherence to oral antihyperglycemic agents (OHA) and subsequent diabetes-related hospitalization and all-cause mortality for patients with type 2 diabetes. OHA adherence was measured by the annual proportion of days covered (PDC) for 2008 and 2009. Among 24,067 eligible patients, 35,507 annual PDCs were formed. Over 90% (n=21,798) of the patients had a PDC less than 80%. In generalized linear mixed model analyses, OHA non-adherence is significantly associated with diabetes related hospitalizations (OR: 1.2; 95% CI [1.1,1.3]; p<0.0001). Older patients, white patients, or patients who had ischemic heart disease, stroke, or renal disease had higher odds of hospitalization. Similarly, OHA non-adherence increased subsequent mortality (OR: 1.3; 95% CI [1.02, 1.61]; p<0.0001). Patient age, male gender, income and presence of ischemic heart diseases, stroke, and renal disease were also significantly associated with subsequent all-cause death.