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Laboratory evidence suggests that urea suppresses insulin secretion and sensitivity. Emerging epidemiologic evidence suggests that higher levels of urea are associated with increased risk of incident diabetes mellitus. However, whether elevated levels of blood urea nitrogen are associated with increased risk of insulin use among people with diabetes is unknown. We used the Department of Veterans Affairs databases to assemble a cohort of 197,994 incident users of non-insulin hypoglycaemic agents with an estimated glomerular filtration rate > 60 mL/min per 1.73 m2 and followed them for a median of 4.93 years. Spline analyses suggested that the relationship between blood urea nitrogen and the risk of insulin use was neutral below blood urea nitrogen level of 25 mg/dL and increased exponentially with blood urea nitrogen levels above 25 mg/dL. In survival models, compared to those with blood urea nitrogen ≤ 25 mg/dL, those with blood urea nitrogen > 25 mg/dL had an increased risk of insulin use (hazard ratio = 1.40; confidence interval = 1.30–1.50). The risk of insulin use was increased in models which accounted for haemoglobin A1c at time zero (hazard ratio = 1.39; confidence interval = 1.28–1.50) and as a time-varying variable (hazard ratio = 1.38; confidence interval = 1.28–1.50). Two-step residual estimation analyses showed that, independent of the impact of estimated glomerular filtration rate, every 10-mg/dL increase in blood urea nitrogen concentration was associated with increased risk of insulin use (hazard ratio = 1.16; confidence interval = 1.12–1.20). Our results suggest that, among people with diabetes, higher levels of blood urea nitrogen are associated with an increased risk of insulin use.