OBJECTIVES: The escalating burden of obesity is of concern to patients, health care professionals, and policy makers.  Health care costs and utilization over an eight-year time period was examined in overweight and obese individuals compared to normal weight individuals within the Veterans Affairs (VA) population.  METHODS: This is a retrospective cohort study of medical and pharmacy records from the VA databases between 2000-2007. Cohorts were stratified based on age and BMI (kg/m2) at baseline.  Costs included total, pharmacy, inpatient, and outpatient costs. Utilization included inpatient stays and outpatient records. Repeated measures ANCOVA was used to assess the impact of longitudinal repeated costs over time between groups.  Multiple and Poisson regressions were used to analyze total costs and utilization over the entire period.   RESULTS: A total of 71,675 veterans were included. There were statistically significant differences in all costs between BMI groups (p<0.0001).  Over the entire time period, compared to normal weight individuals, total adjusted costs were significantly less for overweight and obese individuals (p<0.0001) but no there was no significant difference with severely obese individuals. Average pharmacy and outpatient costs per year for overweight, obese, and severely obese individuals were on higher than normal weight individuals (p<0.0001).  Over the entire time period, adjusted pharmacy costs were $643.61, $1110.03, and $1960.38 higher and outpatient costs were $1021.91, $1651.29, and $2086.46 higher for overweight, obese, and severely obese individuals, respectively, compared to normal weight individuals (p<0.0001). However, average inpatient costs and stays per year were higher for normal weight individuals compared to other weight groups (p<0.0001). CONCLUSIONS: It is unclear why inpatient costs are higher in normal weight individuals than other weight groups in the Veterans population. However, obesity has a significant impact on medical and pharmacy cost and utilization and more emphasis should be placed in managing weight gain.