Chronic bronchitis is a common problem affecting a large proportion of the adult population. People with chronic bronchitis are subject to recurrent attacks of bronchial inflammation called acute exacerbations of chronic bronchitis (AECBs). In patients with AECBs, symptoms may worsen due to a bacterial infection; the exacerbation is then known as an acute bacterial exacerbation of chronic bronchitis (ABECB). ABECBs are thought to be controllable through the use of antibacterial agents. In this paper we review current evidence on the cost of chronic bronchitis and AECBs, the cost effectiveness of antibacterials in the management of ABECB, and the factors that may affect the cost-effectiveness of antibacterials in the management of ABECB. We find that the number of economic evaluations conducted in this area is small. Of the few economic evaluations that have been conducted there has been only one prospective economic evaluation based on a clinical trial. The remainder are simple decision analysis-based modelling studies or retrospective database studies. Our principle findings are as follows: a key factor affecting the cost-effective use of antibacterials in the management of ABECB is the definitive diagnosis of the condition. Unfortunately, diagnosing a bacterial cause of an AECB is difficult, which presents problems in ensuring that antibacterials are not prescribed unnecessarily;current evidence suggests but does not prove that use of more effective but more costly first-line antibacterials may be relatively cost effective and may minimise overall expenditure by reducing the high costs associated with treatment failure;chronic bronchitis and AECB have a significant and negative physical and psychological effect on health-related quality of life. In conclusion, the small number of economic evaluations conducted in this area, coupled with the nature of the design of these studies, precludes a definitive statement recommending which specific antibacterial should be preferred on cost-effectiveness grounds for the management of ABECB. On the basis of our findings we suggest some topics for further research.