BACKGROUND: Nearly 1 million new episodes of herpes zoster (HZ) occur annually in the US, yet little is known about the medical resource utilization (RU) and costs associated with HZ and its complications. OBJECTIVES: To describe the medical RU and cost burden of HZ in the first 90 days and the first year after diagnosis from the health insurer perspective and to stratify this burden for patients diagnosed with post-herpetic neuralgia (PHN) and those who are immunocompromised. In addition, this study explores costs from the societal perspective as a result of work loss in the first year after diagnosis. METHODS: The medical RU and cost data were obtained from the MarketScan Research Database for the years 1998-2003. This database contains inpatient, outpatient and prescription drug data for approximately 14 million individuals of all ages, covered under a variety of fee-for-service and capitated provider reimbursement arrangements, including those with Medicare and private insurance. The work loss estimates were based on the MarketScan Health and Productivity Management Database. Claims for services incurred between 1 January 1998 and 31 December 2003 were screened to identify a cohort of HZ patients based on the presence of at least one International Classification of Diseases, 9th Revision (ICD-9) diagnosis code 053.xx. Each patient was assigned an index date based on the earliest observed occurrence of an HZ diagnosis. A cohort of PHN patients was identified as a subset of the HZ cohort with ICD-9 codes 053.12, 053.13, 053.19 or 729.2x in the period of 90 days to 12 months after the index date. Multivariable regression was used to compare HZ cases with matched controls after adjusting for demographic characteristics, insurance status, co-morbidities and medical expenditure in the 6 months prior to diagnosis for each of the endpoints. Separate regression models were developed, in which age and immune status were stratified. All costs were adjusted to March 2008 values using the medical care component of the Consumer Price Index. The average per patient cost of all HZ cases was $US605 in the first 90 days after diagnosis and $US1052 at 1 year. For the subset with PHN, the average per patient cost of HZ at 1 year was $US3815. For the subset with an immunocompromising condition, the average HZ cost at 1 year was $US1745. The majority of the costs were the result of outpatient visits and prescription drugs. The subset of HZ cases that had both absence hour and short-term disability (STD) records available had 26.5 absence hours and 2.9 STD days. Healthcare utilization, medical care costs and work loss all increased with age for all HZ cases. Based on the results from the present study, the direct medical cost burden of HZ in the US is high, exceeding $US1000 per HZ patient. This direct medical cost may be nearly twice as high in immunocompromised patients and four times as high in the subset of HZ cases with PHN. The direct medical cost burden of HZ may exceed $US1 billion annually in the US. The majority of medical RU and cost burden is incurred by the elderly. Although many people with HZ may no longer be in the workforce, HZ does contribute to lost work time.