BACKGROUND: Cancer-specific medical care costs are used by health service researchers, medical decision analysts, and health care policymakers. The SEER-Medicare database is a unique data resource that makes it possible to derive incidence- and prevalence-based estimates of cancer-related medical care costs by site and stage of disease, by treatment approach, and for age and gender strata for individuals older than 65 years. OBJECTIVES: This paper describes the cost-related data available in the SEER-Medicare database, and discusses techniques and methods that have been used to derive various cost estimates from these data. The limitations of SEER-Medicare data as a source of cost estimates are also discussed. RESULTS: Examples of cost estimates for colorectal and breast cancer derived from SEER-Medicare are presented, including estimates of incidence-based cost (average cost per patient) by the initial, terminal, and continuing care phases of cancer treatment. Estimates of cancer-related treatment costs, costs by type of treatment, and long-term costs are presented, as are prevalence-based costs (aggregate Medicare and national expenditures) by cancer type.