Background: Various multifaceted factors need to be addressed to improve the health and quality of life of people with type 2 diabetes (T2D). Therefore, we developed a web-based decision support tool that comprises a more holistic diagnosis (including 4 domains: body, thinking and feeling, behavior, and environment) and personalized advice. This 360° diagnostic tool enables people with T2D and health care professionals at the general practice to obtain an overview of the most important T2D-related issues and, subsequently, determine the most suitable intervention for the person with T2D. Objective: This study aimed to describe the systematic and iterative development and evaluation of the web-based 360° diagnostic tool. Methods: We defined the requirements for the web-based 360° diagnostic tool based on previously developed tools, a literature review, and inputs from a multidisciplinary team of experts. As part of the conceptualization, we defined 3 requirements: diagnostics; feedback; and advice, consultation, and follow-up. Next, we developed and designed the content for each of these requirements. We evaluated the diagnostic part of the tool (ie, measurement instruments and visualization) with a qualitative design, in a usability study with a think-aloud strategy and interview questions, among 8 people with T2D at a Dutch general practice. Results: For each of the 4 domains, specific parameters and underlying elements were selected, and measurement instruments (including clinical data and questionnaires) were chosen. Cutoff values were defined to identify high-, middle-, and low-ranking scores, and decision rules were developed and implemented using R scripts and algorithms. A traffic light color visual design was created (profile wheel) to provide an overview of the scores per domain. We mapped the interventions that could be added to the tool and developed a protocol designed as a card deck with motivational interview steps. Furthermore, the usability study showed that people with T2D perceived the tool as easy to use, useful, easy to understand, and insightful. Conclusions: Preliminary evaluation of the 360° diagnostic tool by experts, health care professionals, and people with T2D showed that the tool was considered relevant, clear, and practical. The iterative process provided insights into the areas of improvement, which were implemented. The strengths, shortcomings, future use, and challenges are also discussed.