Introduction: Literature shows socioeconomic disparities are related to various aspects of diabetes care. However, few studies have explored the relationship between socioeconomics and healthcare outcomes, particularly with regard to preventable hospitalization. This cohort study employed hierarchical modelling to evaluate the role of socioeconomics at both the individual and regional levels in order to examine disparities associated with the preventable hospitalization of diabetes patients in Taiwan. Methods: This study employed the Longitudinal Health Insurance Database 2010, which provided a representative cohort comprising one million people enrolled in Taiwan's National Health Insurance in 2010. All diabetes patients aged 18 and older who received regular care in 2010 were included in this study. The outcome examined in this study was diabetes-related preventable hospitalization during the period of 2010 to 2011. Socioeconomic status at the individual level was measured according to income and at the regional level according to level of urbanization and the proportion of residents who had completed college education. Control variables included age, gender, comorbidities, time of diabetes diagnosis, participated in the pay-for-performance program status, and the characteristics of regular sources of care, including the level of the facility (i.e., medical centre, regional hospital, local hospital, outpatient clinic) and ownership. Statistical analysis was performed using generalized linear mixed models. Results: A total of 57,791 patients from 25 regions diagnosed with type-2 diabetes mellitus were identified in the National Health Insurance claim data for the year 2010. 1040 of these patients (1.8%) had at least one diabetes-related preventable hospitalization event during the period of 2010-2011. After controlling for the characteristics of patients and health care providers, our results show that dependents and patients in low and middle income brackets (OR = 2.48, 2.44, and 2.08 respectively) as well as those living in regions with a low, median, or high education bracket (OR = 1.32, 1.38, and 1.46 respectively) face a higher probability of preventable hospitalization. Conclusions: Our results demonstrate that the socioeconomic effects of higher education at the regional level as well as income at the individual level are important factors which affect disparities in diabetes-related preventable hospitalization.