To evaluate, according to the histologic type and initial stage, the mean cost (MC) of managing patients with lung cancer and the costs of the different management phases. A Markov approach was used to model these costs, based on the management of a representative nation-wide sample of 428 patients with newly diagnosed lung cancer. The 18-month MC ranged from US$ 20 691 (95% CI: 5777-50 380 for diffuse non-small-cell lung cancer (NSCLC) to US$ 31 833 (95% CI: 15 866-64 455) for localised small-cell lung cancer (SCLC); first-line treatment costs ranged from 33.8% of MC for medically inoperable localised NSCLC to 74.6% for diffuse SCLC; second- or third-line treatment costs ranged from 7.8% of MC for surgically treated localised NSCLC to 32% for locally advanced NSCLC; and the cost of palliative care ranged from 9.1% of MC for locally advanced NSCLC to 39.9% for medically inoperable localised NSCLC. The cost of first-line chemotherapy and the percentage of actively treated patients impacted more on MC than did the cost of second- or third-line chemotherapy regimens or the cost of palliative care. In conclusion, this model provides a robust economic analysis of the cost of lung cancer management, and will be useful for assessing the economic consequences of future changes in patient management.