The importance of physical activity in reducing morbidity and mortality is well established, but the effect of physical inactivity on direct medical costs is less clear. OBJECTIVE: To examine the health care use and health care expenditure associated with physical inactivity in hypertensive patients. An additional objective was to compare differences in the perceived physical health and perceived mental health in these patients. METHODS: Cross-sectional analysis of the 2001 Medical Expenditure Panel Survey that included US civilian men and non-pregnant women aged 15 and older who were not in institutions in 2001. Patients with hypertension were identified by ICD-9-CM code of 401.00. The outcome measures were health care use health care expenditure. We used analysis of covariance to determine differences in health care use and expenditures, adjusting for age, sex, race, marital status, and income status. RESULTS: After adjusting for covariates the expenditures for prescription medications were higher in physically inactive individuals than in physically active individuals with hypertension ($ 736 vs. $621, p = 0.0003). There were no statistically significant differences in other expenditure categories. The total direct cost were significantly different for hypertensive patients who were physically active and those who were not. ($806.80 vs $ 687.04, P = 0.006). Of the individuals with hypertension, those who were physically active reported being in good to excellent health compared to their counterparts who were physically inactive. (56 vs. 39%, P = 0.009). Similarly, physically inactive hypertensive patients reported poor mental health (31 vs. 13%, P = 0.002) than physically active hypertensive patients. CONCLUSIONS: The mean net annual benefit of physical activity in hypertensive patients was $ 120 per person in 2003 dollars. Our results suggest that increasing participation in regular moderate physical activity among these patients could reduce the annual national health care spending by a significant amount.