OBJECTIVES: The direct medical costs of melanoma patients by disease stage have not been well reported.  This study used Surveillance, Epidemiology, and End Results (SEER) – Medicare linked data to examine costs in patients with melanoma, by disease stage. METHODS: All patients diagnosed with stage IIIB, IIIC, M1a, M1b, or M1c melanoma in SEER-Medicare data 2004 - 2009 were included in the study. Follow up period was ≥1 month, starting from the date of the first diagnosis of stage IIIB-M1c melanoma until death or end of the study period.  All-cause medical costs were standardized as per patient per month (PPPM) and adjusted to 2013 dollars. RESULTS: A total of 1263 melanoma patients met the study criteria, with 43.5% at Stage IIIB, 23.0% IIIC, 11.6% M1a, 8.9% M1b, and 12.9% M1c.  Their mean age was 75.0 (standard deviation (SD) 9.3), 65.3% was male, and mean follow up length was 37.5 (SD 22.7) months. The mean PPPM costs were $1851 (SD $2168) for patients with Stage IIIB, $2557 (SD $2759) for Stage IIIC, $2278 (SD $2722) for Stage M1a, $3203 (SD $3582) for Stage M1b, and $4317 (SD $3910) for Stage M1c. Across all disease stages, outpatient and inpatients costs were the primary cost drivers, outpatient costs accounting for 37.5% (for patients at Stage M1c) to 47.7% (for patients at Stage IIIB), while inpatient costs accounting for 36.1% (M1b) to 40.9% (M1c) of the total medical costs. The other cost categories were hospice stay (6.3% - 16.5% of total medical costs), skilled nursing facility (2.8% - 7.8%), home healthcare (0.9% - 1.6%), and emergency room visits (0.9% – 1.2%). CONCLUSIONS: Patients at later stages had higher total medical costs than patients at earlier stages. Treatments that prevent or delay disease progression to later stages could potentially reduce total medical costs.