OBJECTIVES: Despite all the control efforts, Malaysia has yet to effectively reduce the incidence rate of tuberculosis(TB).  TB is not only highly contagious but also causing a significant economic burden in the order of USD16 million/year as reported by World Health Organization(WHO) in 2014. This study aimed to evaluate the economic impact of TB control in Malaysia using a dynamic transmission model. METHODS: Prior to model building, a disease burden study was performed in the state of Selangor representing 18% of the Malaysian population. Identified patient medical records from public hospitals and clinics were randomly selected for study. All direct costs of TB management were captured for analysis. A dynamic transmission model was built to project future disease and economic burdens over a 10-year period. The study was performed from a government perspective. All costs are expressed as USD median (interquartile range). A 3% discount rate was used for projections. RESULTS: A total of 436 successfully treated cases were included in this study. Of these, 195(44.7%) cases required hospitalisation during treatment period. USD616(487-763)/patient was used for non-hospitalisation cases compared to USD1,848(1,164-3,284)/patient for those requiring hospitalisation representing a 3-fold increase. 119 incomplete treatment cases were selected for comparison. USD337(193-902)/patient was used for these incomplete cases. Our model suggests that the total TB cases will increase by 65% in 10 years’ time.  Using the baseline TB population in 2011, an estimated total of USD22.9 million(15.5-37.6 million)/year was used for direct medical costs.  Based on a local estimated 6.9% incompletion treatment rate, an extra USD5.3 million(3.5-8.6 million)/year (22.9% increase) would be required by 2021. CONCLUSIONS: Our findings are consistent with WHO report. In Malaysia, hospitalisation appears to be the major cost driver for TB patients receiving treatment.  Healthcare strategies such as early detection, increased awareness of TB and improved compliance may potentially reduce TB health budget.