Objective To assess the influence of relational climate on quality of diabetes care. Data Sources/Study Setting The study was conducted at the Department of Veterans Affairs (VA). The VA All Employee Survey (AES) was used to measure relational climate. Patient and facility characteristics were gathered from VA administrative datasets. Study Design Multilevel panel data (2008–2012) with patients nested into clinics. Data Collection/Extraction Methods Diabetic patients were identified using ICD‐9 codes and assigned to the clinic with the highest frequency of primary care visits. Multiple quality indicators were used, including an all‐or‐none process measure capturing guideline compliance, the actual number of tests and procedures, and three intermediate continuous outcomes (cholesterol, glycated hemoglobin, and blood pressure). Principal Findings The study sample included 327,805 patients, 212 primary care clinics, and 101 parent facilities in 2010. Across all study years, there were 1,568,180 observations. Clinics with the highest relational climate were 25 percent more likely to provide guideline‐compliant care than those with the lowest relational climate (OR for a 1‐unit increase: 1.02, p‐value <.001). Among insulin‐dependent diabetic veterans, this effect was twice as large. Contrary to that expected, relational climate did not influence intermediate outcomes. Conclusions Relational climate is positively associated with tests and procedures provision, but not with intermediate outcomes of diabetes care.