OBJECTIVES: Excessive consumption of alcohol could cause severe adverse consequences. This study aims at measuring the costs of illness related alcohol in Korea. METHODS: This study employs a prevalence-based approach. First, we review the existing literature for selecting alcohol-related diseases, then estimate both direct and indirect costs of the selected diseases. Next, we compute population attributable risks(PARs) at the risk levels(high- and very high risk) by daily volume. Finally, the estimated socioeconomic costs of illness related alcohol are derived by multiplying the costs of alcohol-related diseases by PARs. Direct costs include medical care expenditures, caregiver’s costs, and traffic costs. Indirect costs are estimated based on human capital theory. The estimated costs are categorized by age of 20 and higher, sex, diseases at the corresponding risk levels. Further, lost earnings due to premature death caused by drink driving fatalities are also estimated based on human capital theory. The cost estimates are reported in USA Purchasing Power Parity Dollars. The major data sources are National Health Insurance Statistical Yearbook, Annual Report on the Cause of Death Statistics, Survey Report on Wage Structure, National Health and Nutrition Survey, the Korean Statistical Information System among others. RESULTS: The estimated socioeconomic cost of illness due to alcohol in Korea in 2007 is 6,709 million PPP$ at 0% discount rate. The costs of the high risk group and the very high risk are 2121 million PPP$ and 4588 million PPP $ respectively. The cost of male(6416 million PPP$) is about 22 times of the cost of female(293 million PPP$). In addition, we get 493 million PPP$ for lost earnings due to premature death caused by fatal traffic accidents. CONCLUSIONS: Excessive consumption of alcohol incurs external costs as well as internal cost, which could give us a rationale for intervention. We need to develop our capacity for controlling consumption of alcohol.