CONTEXT Telemedicine is a promising but largely unproven technology for providing case management services to patients with chronic conditions and lower access to care. OBJECTIVES To examine the effectiveness of a telemedicine intervention to achieve clinical management goals in older, ethnically diverse, medically underserved patients with diabetes. DESIGN, Setting, and Patients A randomized controlled trial was conducted, comparing telemedicine case management to usual care, with blinded outcome evaluation, in 1,665 Medicare recipients with diabetes, aged >/= 55 years, residing in federally designated medically underserved areas of New York State. Interventions Home telemedicine unit with nurse case management versus usual care. Main Outcome Measures The primary endpoints assessed over 5 years of follow-up were hemoglobin A1c (HgbA1c), low density lipoprotein (LDL) cholesterol, and blood pressure levels. RESULTS Intention-to-treat mixed models showed that telemedicine achieved net overall reductions over five years of follow-up in the primary endpoints (HgbA1c, p = 0.001; LDL, p < 0.001; systolic and diastolic blood pressure, p = 0.024; p < 0.001). Estimated differences (95% CI) in year 5 were 0.29 (0.12, 0.46)% for HgbA1c, 3.84 (-0.08, 7.77) mg/dL for LDL cholesterol, and 4.32 (1.93, 6.72) mm Hg for systolic and 2.64 (1.53, 3.74) mm Hg for diastolic blood pressure. There were 176 deaths in the intervention group and 169 in the usual care group (hazard ratio 1.01 [0.82, 1.24]). CONCLUSIONS Telemedicine case management resulted in net improvements in HgbA1c, LDL-cholesterol and blood pressure levels over 5 years in medically underserved Medicare beneficiaries. Mortality was not different between the groups, although power was limited. Trial Registration http://clinicaltrials.gov Identifier: NCT00271739.