Osteoporotic fractures are a major cause of morbidity in the elderly, the most rapidly growing segment of our population. We characterized the incremental direct medical costs following such fractures in a population-based cohort of men and women in Olmsted County, Minnesota. Cases included all County residents 50 years of age and older with an incident fracture due to minimal or moderate trauma between January 1, 1989 and January 1, 1992. For each case, a control of the same age (+/- 1 year) and sex who was attended in the local medical system in the same year was identified. Total incremental costs (cases - controls) in the year after fracture were estimated. Unit costs for each health service/procedure were obtained through the Mayo Cost Data Warehouse, which provides a standardized, inflation-adjusted estimate reflecting the national average cost of providing the service. Regression analysis was used to identify factors associated with incremental costs. There were 1263 case/control pairs; their average age was 73.8 years and 78% were female. Median total direct medical costs were $761 and $625, respectively, for cases and nonfracture controls in the year prior to fracture, and $3884 and $712, respectively, in the year following fracture. The highest median incremental costs were for distal femur ($11756) and hip fractures ($11241), whereas the lowest were for rib fractures ($213). Although hip fractures resulted in more incremental cost than any other fracture type, this amounted to only 37% of the total incremental cost of all moderate-trauma fractures combined. Regression analyses revealed that age, prior year costs and type of fracture were significant predictors of incremental costs (p<0.03 for all comparisons). The incremental costs of osteoporotic fractures are therefore substantial. Whereas hip fractures contributed disproportionately, they accounted for only one-third of the total incremental cost of fractures in our cohort. The use of incremental costs in economic analyses will provide a more accurate reflection of the true cost-effectiveness of osteoporosis prevention.