The purpose of this analytical review was to estimate the direct and indirect economic costs of physical inactivity and obesity in Canada in 2001. The relative risks of diseases associated with physical inactivity and obesity were determined from a meta-analysis of existing prospective studies and applied to the health care costs of these diseases in Canada. Estimates were derived for both the direct health care expenditures and the indirect costs, which included the value of economic output lost because of illness, injury-related work disability, or premature death. The economic burden of physical inactivity was $5.3 billion ($1.6 billion in direct costs and $3.7 billion in indirect costs) while the cost associated with obesity was $4.3 billion ($1.6 billion of direct costs and $2.7 billion of indirect costs). The total economic costs of physical inactivity and obesity represented 2.6% and 2.2%, respectively, of the total health care costs in Canada. The results underscore the importance of public health efforts aimed at combating the current epidemics of physical inactivity and obesity in Canada.