Epilepsy has important socio-economic costs to a population. It is important to assess these costs so that health care priorities can be set. We assessed the burden of illness of epilepsy at the community level, and from this we were able to estimate costs for an individual and the cost to the United Kingdom (UK) as a whole. Cost analysis was based on two different populations of patients with epilepsy, a prevalent and an incident population. Patients with established epilepsy (n = 1628), who were identified from general practices throughout the UK as part of the National Epilepsy Survey (NES), and patients with newly diagnosed epilepsy (n = 602), from the National General Practice Study of Epilepsy (NGPSE), which is a prospective longitudinal cohort study of epilepsy. Indirect and direct costs were assessed in the NES, and direct costs in the NGPSE. A longitudinal cost profile of epilepsy was calculated, with an average initial direct costs of 611 pounds (US$917) per patient per annum which decreased after eight years of follow up to 169 pounds (US$254) per patient per annum. The cost to the UK of newly diagnosed epilepsy in the first year of diagnosis was 18 million pounds (US$27 million). The total annual cost of established epilepsy to the UK was estimated at 1930 million pounds (US$2895 million), over 69% of which was due to indirect costs (unemployment and excess mortality). The cost of active epilepsy per patient was approximately 4167 pounds (US$6251), and of inactive epilepsy 1630 pounds (US$2445) per patient per annum. Methodological issues in cost studies of epilepsy are reviewed.