Background: Smoking causes significant health damage and may incur a significant economic burden to society. This study investigates the years of potential life lost, the direct medical costs and the Indirect costs of cigarette smoking in Germany. Methods: Using the concept of attributable risks and the prevalence-based approach, smoking-attributable mortality and morbidity were calculated for 1993. Neoplasms, cardiovascular diseases, respiratory diseases, perinatal diseases and burn deaths were considered. Attributable risks stem from the literature and were processed in an epidemiological model. Costs were estimated from a societal perspective. Direct costs were mainly calculated based on routine utilization and expenditure statistics and indirect costs were calculated according to the human capital approach. Results: Twenty-two percent of all male and 5% of all female deaths as well as 1.5 million years of potential life lost were attributable to smoking. The costs of acute hospital care, in-patient rehabilitation care, ambulatory care and prescribed drugs were 9.3 billion DEM, of mortality were 8.2 billion DEM and costs due to work-loss days and early retirement were 16.4 billion DEM (discount rate 3%). The total costs added up to 33.8 billion DEM, 415 DEM per inhabitant or 1,599 DEM per current smoker. Sensitivity analyses showed that including the productivity loss of unpaid work leads to a strong increase of indirect costs. Conclusions: This study provides a conservative estimate of the costs of smoking in Germany. The magnitude is considered sufficient reason to call for stronger support of cost-effective, smoke-cessation measures and of anti-smoking policy.