Rheumatic diseases have an economic impact of 1-2.5% of GDP in industrialized countries and osteoarthritis is the most common joint disorder. Osteoarthritis of the knee is especially common and is a major cause of disability requiring extensive utilization of health care resources.To estimate the burden of osteoarthritis of the knee in Italy, we studied retrospectively a cohort of 254 patients over a period of 12 months in 2000-2001.Twenty-nine rheumatology institutes took part in the study. A bottom-up approach was used, analytically measuring pro capita consumption. We considered medical (hospitalization, diagnosis, and therapies) and non-medical costs (transport, temporary caregivers, and auxiliary devices) as direct costs. We calculated losses of productivity borne by patients and caregivers, and informal care provided by caregivers as indirect costs.Direct costs came to Euros 934 per patient per year: Euros 233 were spent on hospitalization, Euros 209 on diagnostic procedures (56% on visits and 44% on instrumental and laboratory tests), Euros 146 on therapy (58% on physiotherapy and 42% on drugs), and Euros 346 on non-medical costs (73% on salaries to temporary caregivers, 14% on transport, and 13% on auxiliary devices). It is interesting to point out that at least 37% of costs were charged directly to patients. Indirect costs were almost 30% higher and came to Euros 1236 per patient per year: 31% was due to loss of productivity of patients, 60% due to informal care provided by primary caregivers, and 9% by other caregivers.This study confirms that the direct and indirect costs attributable to osteoarthritis of the knee are substantial.