OBJECTIVE: Among OECD countries, Korea is of the highest percentage of males aged 15 and over that are daily smokers. This study aims to estimate the socioeconomic cost of diseases due to smoking and to compare with that of all and smoking-related diseases in Korea. METHODS: This study employs a prevalence-based approach. First, we estimate both direct and indirect costs of smoking-related diseases, which are selected from reviewing existing studies. Direct costs include medical care expenditures, traffic costs, and caregiver's costs. Indirect costs are estimated based on human capital theory. Next, we compute population attributable risks (PARs) caused by smoking by disease, age and sex. The socioeconomic costs of diseases due to smoking are obtained by multiplying the costs of smoking-related diseases by PARs. We report the estimates at 40~69 age group 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, and information such as a report from CDC in U.S.A. RESULTS: The estimated economic cost of diseases due to smoking in Korea in 2001 is 3.92 billion USA PPP$($ hereafter) at 0% discount rate, which accounts for 13.8 % of the cost of all diseases and 42.8% of smoking-related diseases at aged 40 ~ 69. The costs of males and females are $3.72 billion and 0$.20 billion, respectively. The cost of malignant neoplasms caused by smoking is $1.86 billion (42.3% of the cost of the diseases), cardiovascular disease, $1.55 billion (41.0%); respiratory disease, $0.51 billion (16.6%). CONCLUSIONS: The economic burden of diseases due to smoking is about 52.8% (9.5%) of that of smoking related diseases and 18.8% (2.3%) of all diseases in males (females).