Data on the economic burden of lower respiratory tract infections (LRTI) in young children are lacking in Germany. The objective of the cost-of-illness study was to estimate the economic impact of community-acquired LRTI and nosocomial LRTI as well as of infections due to respiratory syncytial virus (RSV), parainfluenza viruses (PIV) and influenza viruses (IV). The economic analysis is part of the PRIDE study, a prospective, multi-centre, population-based epidemiological study on the impact of LRTI in children aged 0 to 36 months in Germany. The analysis includes children with community-acquired infections (1329 cases treated as outpatients, 2039 cases treated as inpatients) and nosocomial infections (90 cases). Medical services consumed were generated by chart abstraction and parental expenses data by telephone interviews within four weeks after physician visit or hospitalisation. Costs were evaluated from following perspectives: third party payer, parent and society. Total costs for outpatient treatment are Euro 123 per LRTI case. Stratified by virus type, total costs per case are Euro 163 (RSV), Euro 100 (PIV) and Euro 223 (IV). Total costs per hospitalised LRTI case amount to Euro 2579. Stratified by virus type, total costs per case are Euro 2772 (RSV), Euro 2374 (PIV) and Euro 2597 (IV). Total costs per nosocomial case are Euro 2814. Economic burden due to LRTI is Euro 213 million annually. It is concluded that treatment of LRTI in children up to age three causes a considerable economic burden in Germany. Presented results are the first data describing the economic burden of LRTI in young children assessed by means of the incidence data for Germany. This cost-of-illness study provides basic data for further decision-making, focusing on the economic assessment of preventive strategies for RSV, PIV and IV infections.