Cost-of-illness study to evaluate diabetes-related direct costs for the care of diabetic children and adolescents in Germany from the perspective of the statutory health insurance. For all continuously treated patients < 20 years of age from 89 pediatric departments (n = 6437, 52 % male, mean age 12.5 [SD 3.8], diabetes duration 5.2 [3.3] years), diabetes-related hospitalization, ambulatory care, insulin management, glucose self measurement, and treatment with antihypertensive drugs in 2000 were ascertained, as well as metabolic control (HbA1c). Costs per patient-year were calculated in Euros (EUR) based on year 2000 prices. Using multivariate regression, the associations between costs and age, sex, diabetes duration, and metabolic control were evaluated. Mean total costs per patient-year were EUR 2611 (interquartile range 1665 - 2807). Blood glucose self measurement, hospitalization, and insulin accounted for 37 %, 26 %, and 21 % of the costs, respectively, followed by ambulatory care (9 %), injection equipment and glucagon sets (7 %), and treatment with antihypertensive drugs (0.1 %). The total costs were significantly increased for higher age, longer diabetes duration, and higher HbA1c (p < 0.01). The costs for hospitalization were significantly associated with pubertal age (10 - 14 years) and poor metabolic control (HbA1c SDS > 5) (p < 0.001). Based on the present estimations, the total direct costs for the care of all diabetic subjects in Germany < 20 years would be EUR 66.8 (95 % CI 65.4 - 68.1) million in 2000. Among the direct medical costs of childhood diabetes, the highest economic burden was due to glucose self measurement, hospitalization, and insulin. The costs were considerably higher in adolescents with poor metabolic control, especially the costs for hospitalization. Outpatient education programs in pediatric diabetes care, in particular targeting children with poor metabolic control, should be encouraged, including their evaluation with respect to cost and effectiveness.