OBJECTIVE - To examine racial/ethnic and economic variation in cost-related medication underuse among insured adults with diabetes. RESEARCH DESIGN AND METHODS - We surveyed 5,086 participants from the multicenter Translating Research Into Action for Diabetes Study. Respondents reported whether they used less medication because of cost in the past 12 months. We examined unadjusted and adjusted rates of cost-related medication underuse, using hierarchical regression, to determine whether race/ethnicity differences still existed after accounting for economic, health, and other demographic variables. RESULTS - Participants were 48% white, 14% African American, 14% Latino, 15% Asian/ Pacific Islander, and 8% other. Overall, 14% reported cost-related medication underuse. Unadjusted rates were highest for Latinos (23%) and African Americans (17%) compared with whites (13%), Asian/Pacific Islanders (11%), and others (15%). In multivariate analyses, race/ethnicity significantly predicted cost-related medication underuse (P = 0.048). However, adjusted rates were only slightly higher for Latinos (14%) than whites (10%) (P = 0.026) and were not significantly different for African Americans (11%), Asian/Pacific Islanders (7%), and others (11%). Income and out-of-pocket drug costs showed the greatest differences in adjusted rates of cost-related medication underuse (15 vs. 5% for participants with income ≤$25,000 vs. >$50,000 and 24 vs. 7% for participants with out-of-pocket costs >$150 per month vs. ≤$50 per month. CONCLUSIONS - One in seven participants reported cost-related medication underuse. Rates were highest among African Americans and Latinos but were related to lower incomes and higher out-of-pocket drug costs in these groups. Interventions to decrease racial/ethnic disparities in cost-related medication underuse should focus on decreasing financial barriers to medications.