Burden of diabetes in terms of economic costs and life years lost due to premature deaths and disability in Poland is analyzed. This study calculates direct costs of type 1 and type 2 diabetes in Poland in 1998 and burden of diabetes in terms of years of life lost using Disability Adjusted Life Years (DALYs) measure within the Polish Multicenter Study of Diabetes Epidemiology (1998-1999). There is a consequent need to evaluate the burden of diabetes for the society and to develop affordable and cost-effective preventing strategies. The burden of diabetes is examined in terms of resources used by diabetic patients and time lost due to premature deaths and disability caused by diabetes. The profile of "a standard patient" (type 1 and type 2 diabetes) resource utilization is created using patient survey in Krakow. This includes main elements of cost associated with prevention, diagnosis and treatment: ambulatory care (visits); hospital care (bed/days and dialysis sessions); pharmaceuticals (goods consumed) and diagnosis (tests). This study calculates direct costs to the health sector of type 1 and type 2 diabetes in Poland 1998. Burden of diabetes in Poland in terms of time lost in 1998 is expressed in Disability Adjusted Life Years (DALYs) unit of measurement. DALY is a combination of two dimensions: YLL--number of years lost due to premature mortality; YLD--loss of healthy years due to disability caused by diabetes (with and without complications). The incidence approach is applied for the YLD caused by diabetes type 1 calculations by gender and age groups (0-29 years). Incidence rates are obtained from the prospective data collection [1, 2]. Other data as average age of onset, average duration of the disease (with or without complications), severity (age specific disability weight for treated or untreated forms of diabetes--with or without complications) are obtained from the GBD study for the Formerly Socialist Economies of Europe [9]. Discounting and age weighting procedure is applied. The prevalence approach is applied for YLD caused by diabetes type 2 calculations for treated and untreated forms of diabetes (with and without complications) by gender and age groups (35 years and more). Prevalence data are obtained from the Polish Multicenter Study on Diabetes Epidemiology. Age specific disability weights for treated or untreated forms of diabetes (with or without complication) are obtained from the GBD study for the Formerly Socialist Economies. Discounting procedure is not applied (duration of the disease is assumed 1 year). Years of Life Lost are calculated using Polish mortality data and life expectancy at the time of death in 1998. Cost of diabetes study is particularly useful in indicating the magnitude of the costs involved, which tend to be much higher than perceived by the general public. In 1998 the average diabetes type 1 patient's costs were 6.4 times and diabetes type 2 patient's costs 3 times higher than average public direct health care costs. The total costs of diabetes in Poland 1998 accounted for 9.3% of total public health care expenditures. The cost of diabetic patient's estimation indicates the potential benefits of effective medical interventions. Not only mortality rates should be taken into consideration in the creation of health policy and financial planning. Disability of the population is also an important factor, particularly in diseases which do not lead to fatalities. In 1998 112,584 DALYs (46% for males and 54% for females) were lost in Poland due to premature deaths and disability caused by diabetes. 72% of the total was due to disability. Secondary prevention is very important especially for diabetes type 2 patients. 95% of total time lost due to disability is caused by diabetes type 2. National burden of disease evaluation is helpful to develop a justifiable basis for setting priorities in purchasing and investing at central and local levels especially in prevention.