The economic cost of tobacco use is well documented in high-income countries. It has been measured in relatively fewer low-and middle-income countries, and much less in sub-Saharan Africa despite the longstanding recognition of significant current and future health risk to people attributed by tobacco use in this region. This article fills this gap by estimating the economic cost of tobacco use in Uganda, a low-income country in sub-Saharan Africa. This study estimates the economic cost of tobacco use in Uganda using the cost-of-illnesses approach based on data collected from a survey of patients and caregivers in four major service centers in Mulago National Referral Hospital, namely, Uganda Cancer Institute, Uganda Heart Institute, Chest Clinic and Diabetic Clinic, key informant interviews and secondary sources for the year 2014. The total direct health care and non-health care cost of tobacco-related illnesses in Uganda was USD 41.56 million. The total indirect morbidity and mortality costs from the loss of productivity due to tobacco-related illnesses were USD 11.91 million and USD 73.01 million, respectively. The direct and indirect costs of tobacco use added up to USD 126.48 million, which is equivalent to 0.5% of GDP, a proportion comparable to the estimated health cost of tobacco use in other countries. The total health care cost of tobacco-related illnesses constitutes 2.3% of the national health care account which is already over-burdened with the cost of infectious diseases, limited medical personnel and infrastructure. In addition, tobacco-related illnesses heavily reduce life expectancy of tobacco users and ultimately their economic productivity. The cost of tobacco-related illnesses in Uganda far outweighs the benefits of employment and tax revenue generated from the tobacco sector. Stronger tobacco control measures need to be undertaken to reduce the disease and economic burden of tobacco use in this country.