Aims/hypothesis: We examined the prognosis of well-characterised community-based diabetic patients with asymptomatic bacteriuria (ASB). Methods: We studied 496 adults with type 1 or 2 diabetes participating in a prospective observational study. In addition to detailed clinical and laboratory data, a single mid-stream urine sample was taken for aerobic culture and antibiotic-sensitivity testing. ASB was defined as >= 10(5) colony-forming units/ml of one or two organisms without symptoms of urinary infection. Patients were followed for 2.9 +/- 0.6 years for hospital admission for/with urosepsis or death. Results: Thirty-six patients (7.3%) had ASB, comprising 33 females (14.4% of all females) and three males (1.1% of all males). Only female sex predicted ASB amongst a range of variables including indices of metabolic control. Twenty-nine patients (5.8%) were subsequently hospitalised with urosepsis. Of these, urosepsis was the principal diagnosis in 12 (41%). In a Cox proportional hazards model, ASB was associated with an increased risk of hospitalisation for urosepsis as principal diagnosis ( hazard ratio [95% CI] 4.4 [1.2-16.5]; p=0.004). ASB did not predict the combined endpoint of hospitalisation with urosepsis as principal or secondary diagnosis (2.3 [0.8-6.7]; p=0.12), or of non-urinary sepsis as principal (n=12) or principal/secondary (n=28) diagnosis (p > 0.3). Conclusions/interpretation: ASB identifies diabetic patients who are at significantly increased risk of subsequent urosepsis requiring hospitalisation. Further large-scale studies are needed to establish the cost-effectiveness of screening for, and pre-emptive treatment of ASB, especially in females.