Objective To characterize the relationship between potentially preventable hospitalizations (PPHs) for diabetes and behavioral health conditions in commercially insured working-age persons with diabetes in the United States. Research design and methods We retrospectively analyzed medical and pharmacy claims from services rendered between 2011 and 2013 for 229,039 adults with diabetes. Diabetes PPHs were identified using the Agency for Healthcare Research and Quality's Prevention Quality Indicators v6.0 logic. We used negative binomial-logit hurdle regression models to explore the adjusted relationships between diabetes PPHs and schizophrenia, bipolar, depression, anxiety, adjustment disorder, alcohol use disorder, and drug use disorder. Results A total of 4,521 diabetes PPHs were experienced by 3,246 of the persons in the sample. The 20.83% of persons with one or more behavioral health conditions experienced 43.62% (1,972/4,521; 95% CI 42.18%-45.07%) of all diabetes PPHs, and the 7.14% of persons with more than one diagnosed behavioral health condition experienced 24.77% (1,120/4,521; 95% CI 23.54%-26.05%) of all diabetes PPHs. After adjusting for sociodemographic and physical health covariates, patients with depression, schizophrenia, drug or alcohol use disorders, or multiple behavioral health conditions were at significantly increased risk of experiencing at least one diabetes PPH, while patients with depression, drug use disorder, or multiple behavioral health conditions were at significantly increased risk of experiencing recurring diabetes PPHs over time. Conclusions A number of behavioral health conditions are associated with diabetes PPHs, which are often preventable with timely, high-quality outpatient care. The results of this study will enable clinicians, payers, and policy-makers to better focus outpatient care interventions and resources within the population of persons with diabetes.