Increasing interest in and use of complementary and alternative medicine (CAM) is evident across the world among both the general population and patients with chronic illness. CAM refer to practices, approaches, knowledge, and beliefs outside conventional medicine, such as biologically based practices, mind-body therapies, and manipulative and body-based practices. The presence of chronic, devastating or painful illness has consistently been reported to be a common reason for CAM use. Diabetes is a prevalent, chronic and incurable disease associated with a range of complications which can be life-threatening. Little is known about the prevalence of CAM use, which types are being used and the characteristics of CAM users among people with Type 2 diabetes living in Taiwan. This mixed methods study was designed to explore the patterns of CAM use, the factors predicting CAM use and the decision-making processes used by CAM users. Within the framework of the health belief model, a cross-sectional survey was undertaken using structured personal interviews (n = 326) in outpatient clinics in different regions of Taiwan. The survey explored CAM use among people with Type 2 diabetes. In addition, in-depth qualitative interviews were carried out with some survey participants (n = 16). These qualitative interviews were used to detail how CAM users made decisions regarding CAM use in the management of their illness in a Taiwanese context. The results of this study have provided the first comprehensive exploration of CAM use among people with Type 2 diabetes living Taiwan. More than half the participants (56.1%) who visited diabetic clinics reported using at least one CAM therapy in the previous 12 months but only one in three of CAM users obtained CAM therapies through CAM practitioners. Nutritional supplements, traditional Chinese medicines, manipulative based therapies, diet modifications and supernatural healing therapies were the most commonly used CAM therapies. The demographic profile of CAM users with Type 2 diabetes who were of older age, living in the city, practising religion, either being married or widowed, and suffering from more complications and diabetes-related symptom distress. The major finding of this study was that the predictors of CAM use were a positive perception of CAM, personal surroundings and illness-related suffering. Results from the qualitative findings revealed that there are five major stages in the CAM decision-making process reported by CAM users with Type 2 diabetes living in Taiwan: recognizing the need for using CAM; assessing potential CAM before use; matching CAM use to personal philosophy; on-going evaluation of CAM; and using CAM to manage health and illness. However, patients are likely to use both conventional medicine and CAM in managing their illness and health without disclosing (75.3% non-disclosure rate) their CAM use to their conventional healthcare professionals. The lack of communication may increase the possibility of CAM-drug interactions and lead to the potential for impairment of disease management provided by conventional healthcare professionals. The results of this study can be used to improve clinical assessment, professional and patient education and clinical research. Improving health professional education about CAM and developing an open and honest communication channel between patients and conventional healthcare professionals is imperative if patient safety is to be maintained which chronic disease self-management is being pursued.