Objective: The aim of this study was to estimate the cost of lung cancer treatment in the first year afterdiagnosis in Iran. Materials and Methods: Patients from two referral hospitals providing all lines of treatmentto cancer patients in Tehran were sampled. The direct cost included the costs that patients and other payer’s(insurance, NGO’s, or other source of payment services) paid for the services received since their first confirmeddiagnosis of cancer for the duration of one year. Nine items of services were evaluated for each case with exactcosts abstracted from patient’s files. Using incidence of lung cancer and population figure of the country, totalnumber of lung cancer was estimated. The total and itemized costs were estimated using an average per patientsfor each service. Results: The average age at diagnosis was around 56 years and majority of cases were male.All patients were insured by major insurance companies. A total of 5,829 cases of lung cancer were estimated tooccur in 2010. The average±standard deviation (sd) of duration of hospital stay was 11.9±9.7 days. Not all thepatients received all lines of services: 86% received surgery, 36% radiotherapy; and 45% chemotherapy in thefirst year. Some 14% of cases utilized physiotherapy and 11.5% needed pre-treatment counseling. The grandtotal cost of treatment for the first year of services since diagnosis was estimated at 11,262,386 US dollars forthe whole population of Iran in the year 2010. Among different services provided to the patients, surgery withannual cost of 3,178,725 US dollars constitute 28% of the total cost; radiotherapy and cost of paid for medicationwith an annual cost of 4,242,244 US dollars accounted for 38% of total costs. With 7.8% of Iranian GDP beingconsumed in health expenditure, the direct cost of lung cancer for the first year after diagnosis amounted to4% of this figure. Conclusion: Our study, the first to estimate the direct cost of lung cancer in Iran, indicatehow costly lung cancer is to the country. More comprehensive studies are needed to validate our results plus toassess other cost including indirect costs.