This study assessed the cost to society of multiple sclerosis (MS) in Sweden in 1998. The cost-of-illness method, based on the human capital theory, was used as the theoretical framework. The study used a cross-sectional approach, in which resource utilization data and quality-of-life data (utilities) were collected at a single time point. The total cost of MS was estimated at 4868 MSEK, or 586 MEUR, giving an annual cost of 442 500 SEK, or 53 250 EUR, per patient (1USD = 9.73 SEK, 1 EUR = 8.31 SEK, as of 21 September 2000). Direct costs accounted for about 67% of total cost, and they were dominated by the cost of personal assistants and drugs. Indirect costs (loss of production) accounted for about 33% of total costs. To these economic costs, intangible costs of 2702 MSEK (325 MEUR) should be added as well. Direct, indirect and informal care costs all rose significantly with increased disability and were higher during a relapse. Quality of life declined substantially with increased disability and was lower during a relapse. Multiple sclerosis was found to be associated with much higher costs to society than has been ascertained by former studies. The study also revealed a strong correlation between severity of the disease and quality of life. These results are crucial for further studies on the cost-effectiveness of new treatments aimed at preventing relapses and reducing progression of the disease.