BACKGROUND & AIMS: Economic analysis in chronic diseases is a prerequisite for planning a proper distribution of health care resources. We aimed to determine the cost of inflammatory bowel disease, a lifetime illness with considerable morbidity. METHODS: We studied 1321 patients from an inception cohort in 8 European countries and Israel over 10 years. Data on consumption of resources were obtained retrospectively. The cost of health care was calculated from the use of resources and their median prices. Data were analyzed using regression models based on the generalized estimating equations approach. RESULTS: The mean annual total expenditure on health care was 1871 Euro/patient-year for inflammatory bowel disease, 1524 Euro/patient-year for ulcerative colitis, and 2548 Euro/patient-year for Crohn's disease (P < .001). The most expensive resources were medical and surgical hospitalizations, together accounting for 63% of the cost in Crohn's disease and 45% in ulcerative colitis. Total and hospitalization costs were much higher in the first year after diagnosis than in subsequent years. Differences in medical and surgical hospitalizations were the primary cause of substantial intercountry variations of cost; the mean cost of health care was 3705 Euro/patient-year in Denmark and 888 Euro/patient-year in Norway. The outlay for mesalamine, a costly medication with extensive use, was greater than for all other drugs combined. Patient age at diagnosis and sex did not affect costs. CONCLUSIONS: In this multinational, population-based, time-dependent characterization of the health care cost of inflammatory bowel disease, increased expenditure was driven largely by country, diagnosis, hospitalization, and follow-up year.