BACKGROUND: Coronavirus disease 2019 (COVID-19) is a global pandemic that had affected more than eight million people worldwide by June 2020. Given the importance of the presence of diabetes mellitus (DM) for host immunity, we retrospectively evaluated the clinical characteristics and outcomes of moderate-to-severe COVID-19 in patients with diabetes. METHODS: We conducted a multi-center observational study of 1,082 adult inpatients (aged >/=18 years) who were admitted to one of five university hospitals in Daegu because of the severity of their COVID-19-related disease. The demographic, laboratory, and radiologic findings, and the mortality, prevalence of severe disease, and duration of quarantine were compared between patients with and without DM. In addition, 1:1 propensity score (PS)-matching was conducted with the DM group. RESULTS: Compared with the non-DM group (n=847), patients with DM (n=235) were older, exhibited higher mortality, and required more intensive care. Even after PS-matching, patients with DM exhibited more severe disease, and DM remained a prognostic factor for higher mortality (hazard ratio, 2.40; 95% confidence interval, 1.38 to 4.15). Subgroup analysis revealed that the presence of DM was associated with higher mortality, especially in older people (>/=70 years old). Prior use of a dipeptidyl peptidase-4 inhibitor or a renin-angiotensin system inhibitor did not affect mortality or the clinical severity of the disease. CONCLUSION: DM is a significant risk factor for COVID-19 severity and mortality. Our findings imply that COVID-19 patients with DM, especially if elderly, require special attention and prompt intensive care.