Lung cancer is a major cause of morbidity and mortality. In this paper, the hospital costs incurred by 724 lung cancer patients diagnosed in 2001 were determined by review of case notes. These represented all patients diagnosed with lung cancer in Northern Ireland on whom data existed in that year. Total hospital costs in the 12 months from presentation for the 724 patients were 3.99 million pounds. Average patient costs were 5,956 pounds for patients diagnosed with non-small cell lung cancer and 5,876 pounds for those with small cell lung cancer. The main component of cost was inpatient stay, representing between 62 and 84% of costs depending on cell type. Multivariate analyses revealed significant differences in cost related to staging, co-morbidities, age, and deprivation. Total annual hospital costs were 13 times as high as the estimated enforcement cost of the smoke-free legislation in Northern Ireland.