Abstract Molecular communication is a new communication paradigm that uses molecules for information transmission between nanomachines. Similar to traditional communication systems, several factors constitute limits over the performance of this communication system. One of these factors is the energy budget of the transmitter. It limits the rate at which the transmitter can emit symbols, i.e., produce the messenger molecules. In this paper, an energy model for the communication via diffusion system is proposed. To evaluate the performance of this communication system, first a channel model is developed, and also the probability of correct decoding of the information is evaluated. Two optimization problems are set up for system analysis that focus on channel capacity and data rate. Evaluations are carried out using the human insulin hormone as the messenger molecule and a transmitter device whose capabilities are similar to a pancreatic β-cell. Results show that distance between the transmitter and receiver has a minor effect on the achievable data rate whereas the energy budget's effect is significant. It is also shown that selecting appropriate threshold and symbol duration parameters are crucial to the performance of the system. © 2010 Elsevier Ltd.