OBJECTIVE: To estimate the excess cost of stroke in Sweden, and potential cost offsets by preventing the occurrence of first-ever stroke. METHODS: We adopted the incidence approach for estimating the present value of both direct- and indirect costs. Data on mortality, stroke recurrence and inpatient care were estimated from a national register of patient data with a 4-year follow-up period. To estimate costs for social services we used registered data on living conditions before stroke onset, and at 3 and 24 months. Costs for outpatient visits, rehabilitation, drugs and production losses due to premature death and early retirement are estimated on the basis of both published and non-published sources. Lifetime costs are extrapolated from year five and for subsequent years adjusted by age, gender and excess mortality for stroke. RESULTS: With an incidence of 17,000 first-ever strokes in Sweden (195/100,000 individuals), the total excess direct and indirect cost of stroke is SEK9.5 billion (approximately US$1.2 billion or €1.0 billion) in year 2000 prices. About SEK7.4 billion is direct costs and SEK2.1 billion indirect costs. Half of the direct costs are costs for social services. The present value direct cost for an average stroke patient is SEK434,000 (US$54,250 or €48,740) and the indirect cost is SEK125,000 (US$15,600 or €13,750). CONCLUSIONS: There are large potential cost offsets both in the health care sector and in the social service sector if the incidence of first-ever stroke could be reduced.