Mycobacterium ulcerans infection results in significant disfiguring morbidity, and treatment is expensive. To estimate the cost of treatment in the antibiotic era, a retrospective study of 71 patients diagnosed and treated for M. ulcerans in the Bellarine Peninsula (Victoria, Australia) between 1998 and 2006 was performed. Patients were categorised into minor single episode infection, major single episode infection and recurrent disease. Data were collected on each treatment cost component. To determine the change from costs in the pre-antibiotic era, mean direct costs were compared with those from a study in a nearby region between 1991 and 1998. All costs were in Australian dollars in 2006-2007 prices. The mean overall cost was $6181 per episode, with the highest cost components being hospitalisation (mean $3977; 63%) and surgeon fees ($949; 12%). Treatment costs per episode increased significantly from minor infection ($2235) to major infection ($6338) to recurrent disease ($13 372). Compared with the pre-antibiotic era, costs have significantly decreased, with a 52% reduction in overall cost per episode, driven mainly by a reduction in hospitalisation costs. Therefore, earlier diagnosis and treatment of M. ulcerans, including the use of outpatient-based oral antibiotic regimens, has the potential to reduce the cost of treatment.