Even though it is widely recognised that influenza is a serious disease that causes significant consequences in terms of morbidity and mortality, implying considerable healthcare costs and loss of productivity, there is a lack of data about the economic impact of an influenza epidemic in Italy. OBJECTIVES: The aim of this study was to estimate the social cost of a normal influenza epidemic in Italy using a generic algorithm for influenza outbreak and treatment. METHODS: Referring to the demographic characteristics of the population, to the published literature and to the epidemiological data (influenza season 1998/99), a simulation of the impact of a real influenza epidemic was run. The health service use and unit costs were estimated from standard data sources. RESULTS: The average direct costs of influenza per person in Italy were lit. 68,000 ($US 36), for the overall population, and lit. 155,000 ($US 82.26) for a high-risk patient; the average indirect costs of influenza per working patient were lit. 569,000 ($US 301.97). Hence, the total cost of a case of influenza in Italy was about lit. 637,000 ($US 338). In general, around 90% of total costs consisted of indirect costs. Costs are sensitive to changes in the rate of hospitalisation and to changes in the proportion of the active population. CONCLUSIONS: Cost-of-illness studies should be as observational to reflect the real world. Nevertheless, if relevant data are not available, a suitable model, which uses reliable data, can give consistent estimates of the cost of influenza in Italy. This kind of models may help decision-makers heighten awareness of the burden of influenza and design prevention and treatment strategies.