[unreadable] Diabetes patients with co-occurring depression (DM/D) represent a large and especially vulnerable population that may not benefit from advances in knowledge regarding the importance of glycemic control and physical activity enhancement. This randomized effectiveness trial will evaluate a patient-centered intervention designed to improve diabetes outcomes among DM/D patients through a protocol-driven, telephone-based care management model. The intervention is based on epidemiologic evidence and randomized trials demonstrating: the impact of depression management on depression and diabetes treatment outcomes; the efficacy of telephone care for diabetic patients and depressed patients; the impact of physical activity promotion on outcomes among diabetic and depressed patients; and the efficacy of improving diabetes patients' communication skills with their clinicians. 382 DM/D patients will be randomized to either: (1) enhanced usual care consisting of brief education regarding depression, diabetes self-care, and physical activity promotion; or (2) telephone-based, staged care management that includes antidepressant medication care management (MCM) and/or cognitive behavioral therapy (CBT). Both the MCM and CBT modules are based on interventions with proven efficacy. The MCM module will use a widely-accepted algorithm to identify efficacious antidepressant agents, determine appropriate doses, and promote adherence. MCM patients also will receive brief physical activity counseling. The CBT module will address patients' depressive symptoms, physical activity levels, and patient-provider communication skills. Structured communication between care managers and patients' physicians will insure that the intervention is integrated with patients' overall care plans. To maximize generalizability, participants will be drawn from three geographically proximate healthcare systems. The intensive intervention phase will consist of frequent telephone contacts by a nurse serving as a care manager and using manualized MCM and CBT protocols. The maintenance phase will consist of monthly telephone follow-up to monitor patients' progress, reinforce educational messages, and promote continued treatment adherence. Outcomes will be measured at four- and 12-months. Primary endpoints will be HbA1c levels and a cardiovascular risk index. Secondary endpoints include proximal intervention targets (e.g., depressive symptoms, physical activity levels, medication adherence, and provider-patient communication), quality of life, treatment satisfaction, and resource use. The evaluation has been structured based on the RE-AIM framework for effectiveness trials. [unreadable] [unreadable]