Background: There are conflicting recommendations and highly variable practices regarding the level of A1c to initiate insulin for individuals with newly diagnosed diabetes. This is complicated in low-income settings where adverse reactions or negative perceptions of insulin are often magnified. Objectives: Compare the clinical outcomes of insulin and Oral Agents (OAs) in low-income settings in the United States. Methods: We conducted a retrospective chart review in community clinics serving low -income individuals with newly diagnosed type 2 diabetes who were initiated on insulin or OAs. The primary outcome was change of hemoglobin A1c (A1c) from baseline to 12 months. Secondary outcomes consisted of other clinical measures including Emergency Department (ED) visits. Results: A total of 18% (88/489) of patients were started on insulin. The adjusted average decrease of A1c from baseline was greater in the OA group (insulin: -1.97% vs. OA: -2.52%; p<0.001). In a subset analysis of individuals with A1cs >11%, significantly more patients were started on OAs (insulin: n=51, OA: n=93; p<0.001) and A1c improvements were similar at 12 months (insulin: -5.06% [12.94% to 7.88%] OA: -4.62% [12.57% to 7.96%]; p=0.846). Baseline A1c predicted insulin initiation (p<0.001): For every one-unit increase in baseline A1c, the odds of insulin initiation increased by 47.5%. Individuals in the insulin group had more ED visits per year (0.169 vs. 0.0025; p<0.005). Conclusions: Given the positive clinical outcomes of OAs even with markedly elevated A1c levels in addition to the healthcare system benefits, they are a promising initial therapy for low-income adults with newly diagnosed type 2 diabetes.