BACKGROUND:The economic consequences of environmental tobacco smoke (ETS) have been simulated using models. We examined the individual-level association between ETS exposure and medical costs among Japanese nonsmoking women. METHODS:This population-based cohort study enrolled women aged 40 to 79 years living in a rural community. ETS exposure in homes at baseline was assessed with a self-administered questionnaire. We then collected health insurance claims data on direct medical expenditures from 1995 through 2007. Using generalized linear models with interaction between ETS exposure level and age stratum, average total monthly expenditure (inpatient plus outpatient care) per capita for nonsmoking women highly exposed and moderately exposed to ETS were compared with expenditures for unexposed women. We performed separate analyses for survivors and nonsurvivors. RESULTS:We analyzed data from 4870 women. After adjustment for potential confounding factors, survivors aged 70 to 79 who were highly exposed to ETS incurred higher expenditures than those who were not exposed. We found no significant difference in expenditures between moderately exposed and unexposed women. Total expenditures were not significantly associated with ETS exposure among survivors aged 40 to 69 or nonsurvivors of any age stratum. CONCLUSIONS:We calculated individual-level excess medical expenditures attributable to household exposure to ETS among surviving older women. The findings provide direct evidence of the economic burden of ETS, which is helpful for policymakers who seek to achieve the economically attractive goal of eliminating ETS.