OBJECTIVES: We have aimed to estimate the direct and indirect costs of treating out-patients with schizophrenia in Korea, to use this fundamental data for the effective management and proper distribution of the medical resource. METHOD: To estimate the direct cost, we surveyed the medical cost and time of two hundred and eighty-nine out-patients with schizophrenia for six months. And the lost productivity as many months was converted into the indirect cost. Those of eighty-two coronary heart disease patients were also estimated as a comparison group. RESULTS: An unemployement rate of schizophrenic patients was 72.1 percent. Moreover the ratio of the laborer in the sample was, even if employed, 64.5 percent. The mean direct cost of schizo-phrenic patients was, about 815,000 won, higher than that of coronary heart disease, 715,000 won however it was not statistically significant. The former was also estimated 2.5 times more than the latter for the indirect cost, or 6,456, 000 won versus 2,589,000 won. CONCLUSION: Schizophrenia is a relatively costly illness compared to other chronic illness, so the systematic estimation of the cost is necessary to provide mental health service of high quality.