Approximately 34 million US adults were obese in 1980. Obesity is associated with increased risk of noninsulin-dependent diabetes mellitus (NIDDM), hypertension, cardiovascular disease, gallbladder disease and cholecystectomy, and colon and postmenopausal breast cancer. Using a prevalence-based approach to cost of illness, we estimated the economic costs in 1986 attributable to obesity for these medical conditions. Indirect costs due to morbidity and mortality were discounted at 4%. Overall, the costs attributable to obesity were $11.3 billion for NIDDM, $22.2 billion for cardiovascular disease, $2.4 billion for gall bladder disease, $1.5 billion for hypertension, and $1.9 billion for breast and colon cancer. Thus a conservative estimate of the economic costs of obesity was $39.3 billion, or 5.5% of the costs of illness in 1986. Addition of costs due to musculoskeletal disorders could raise this estimate to 7.8%. The costs of treatment for severe obesity must be weighed against the improved health status and quality of life.