Objective Depression affects one in four adults with type 2 diabetes (T2DM) and is associated with worsened diabetes complications, increased health care costs and early mortality. Rural and low-income urban areas, including the Appalachian region, represent an epicenter of the T2DM epidemic. Program ACTIVE II is a comparative effectiveness treatment trial designed to test whether a combination of cognitive behavioral therapy (CBT) and community-based exercise (EXER) will offer greater improvements in diabetes and depression outcomes compared to individual treatment approaches and usual care (UC). The secondary aims are to assess changes in cardiovascular risk factors across groups and to conduct a cost-effectiveness analysis of predicted incidence of cardiovascular complications across groups.