This study examines the effect of alcoholism treatment services on overall health care utilization and costs for health insurance enrollees under the Federal Employees Health Benefit Program with Aetna Insurance Company, 1980 through 1983. Claims filed by 1697 treated alcoholics (and their family members) continuously enrolled with Aetna during the study period were examined. In the years prior to initial alcoholism treatment, alcoholics incurred gradually increasing total health care costs on the average. These costs rose dramatically in the six months prior to treatment, began to decline after treatment initiation, and continued to fall during several follow-up years. For alcoholics less than 45 years of age, costs eventually declined to a point comparable with the lowest pretreatment levels.