OBJECTIVES The cost of acute exacerbations of asthma had not been well studied in literature. The aim of this study was to identify and quantify the (average) cost of moderate and severe exacerbations of asthma in patients attending tertiary-care setup in Malaysia. The related burden of exacerbations was also calculated. METHODS The costs including lab investigation charges, unit costs of treatment per bed, medication charges, food costs, transportation costs and loss of productivity were calculated per asthma episode. Data was analysed by Statistical Package for the Social Sciences (SPSS) version 18.0 using various descriptive and inferential statistical tests.   RESULTS A median medical cost of acute exacerbation of asthma under Ministry of Health’s (MOH) perspective was USD 105.00 (RM338.47) per episode. Medication cost comprised the majority (52.38%) of the total medical costs. A median medical cost of acute exacerbation of asthma under patient’s perspective was USD 1.55 (RM4.99) per episode.   CONCLUSIONS Asthma exacerbation and length of stay in the hospital were proportional to the direct medical costs. In Malaysia, a substantial proportion of the direct medical cost of asthma treatment is heavily subsidised for the locals.