Hepatitis B virus (HBV) infection is the most common cause of chronic viral liver disease in Singapore. Nevertheless, very little data exist on the financial burden of HBV infection to the society as a whole. The aim of this study was therefore to assess the direct and indirect cost of HBV infection in a cost-of-illness analysis. The combined data from the direct and indirect cost with the estimated prevalence for different disease stages of HBV infection would represent the annual financial burden of HBV infection to the Singaporean society as a whole. The estimated total annual cost of chronic HBV infection and its associated complications in Singapore was US$279 million (range US$34-941 million when allowing various assumptions as tested by the sensitivity analyses), with 58% or US$161 million attributable to direct cost. Based on the base-case estimation, total direct cost alone is equivalent to 12% of the national healthcare expenditure for 2003. The total cost incurred by chronic hepatitis B patients represents the biggest cost component, followed by decompensated cirrhosis (DC) patients. The ratio of direct to indirect costs based on the base-case estimation increased with disease severity, with the highest ratio obtained for the post-liver transplants (40.2:1), followed by hepatocellular carcinoma (7.4:1) and DC patients (2.7:1). The results of this study suggest that the management of HBV infection poses more than a medical challenge as it is a sizeable economic burden from both the payer and societal perspectives.