Insulin-dependent diabetes mellitus (IDDM) is a prevalent chronic disease that causes marked personal and financial costs for patients, their families and society. Accurate information on costs of the disease is scarce. In this article, we review studies on disease and disease stage-connected costs at the individual and societal levels, and discuss possibilities of decreasing or preventing costs attributable to IDDM. The 3 disease stages are the initial treatment, follow-up after the initial treatment and late treatment. Total costs of IDDM in a given country depend on the incidence of the disease and the efficiency (cost effectiveness) of treatment. Besides everyday treatment costs, the acute and long term complications of the disease cause major additional costs. The lifetime financial costs of IDDM and the amount of human suffering are always substantial. The costs of the 3 clinical stages of IDDM differ markedly. The initial and late periods induce cost peaks, but the costs of follow-up after initial treatment are small. During initial treatment, costs depend mostly on the possible length of hospitalisation. During the late treatment period, costs begin to accumulate rapidly because of long term complications such as diabetic nephropathy, retinopathy, neuropathy and macrovascular disease. Intensive ambulatory care, effective patient education that results in normoglycaemia or near-normoglycaemia in patients and, if needed, shortening of hospitalisations, are the only means to restrict or decrease the costs of IDDM until primary prevention is available. Postponing complications by any length of time will always decrease human suffering and lead to marked savings in healthcare resources.