Cost-of-illness studies have shown diabetes to be associated with substantial direct and indirect costs, accounting for 5-6 percent of total health care expenditure. In a Swedish study, where total costs were divided into costs due to management of diabetes and costs due to complications, the total annual cost to the community was estimated to be SEK 5.7 billion in 1994, costs due to complications being the major item, accounting for over 75 per cent of the total. There have been few other Swedish studies of costs for diabetes or diabetes-related complications. The most widely studied category of complications is diabetes-related foot ulcers, with an estimated annual cost of SEK 1-2 billion. However, earlier studies were marred by shortcomings: costs estimated for the main diagnosis only, without breakdown into categories or distinction between type 1 and type 2 diabetes, sources of data other than official data-bases ignored, etc. Diabetes care in Sweden is of high quality, and substantial clinical, epidemiological and health economics research has been carried out. It is important that Sweden contributes to international research on health economics aspects of diabetes.