Goals: To estimate the direct medical costs involved in the treatment of chronic hepatitis B (CHB) patients in Taiwan from a public resource perspective. Background: Taiwan is a hepatitis B virus (HBV)-hyperendemic area that has considerable expertise in conducting hepatitis studies. To date, however, these studies have focused on basic science or clinical research associated with hepatitis 13, and little attention has been paid to the social and monetary consequences of treatment and vaccination programs in Taiwan. Study: Total per-patient annual costs were calculated for each of live disease states associated with hepatitis B infection. Method: Claims data of National Health Insurance in 2000 were used to identify patients with CHB and to estimate breakdown costs of their medical usage. Medical costs included hospital admissions and outpatient visits, with fees being reimbursed by the National Health Insurance system and patient co-payments. Results: The average total costs per patient for each disease state in the year 2000 were as follows: CHB without cirrhosis, 4905 new Taiwan dollars (NT $); compensated cirrhosis, NT $6,574; decompensated cirrhosis, NT 36,621; hepatocellular carcinoma, NT $95,741; and liver transplantation, NT $199,725. These values indicate that, as the disease progresses, the cost of medical care increases significantly. Conclusion: The total inpatient cost for CHB infection in Taiwan for the year 2000 was almost NT $800 million, which accounts for approximately 1% of the total inpatient expenditure. CHB is a significant burden on the Taiwanese healthcare system that could be limited by slowing or reversing liver disease progression.