OBJECTIVES: There are few data on the treatment patterns and associated cost of treating children with inflammatory arthritis including juvenile idiopathic arthritis (JIA), in the short or long term. The aim of this study was to obtain patient-based costs for treating children with JIA in the UK, in the first year from diagnosis and from the secondary health care payer perspective. METHODS: The Childhood Arthritis Prospective Study (CAPS) is an ongoing longitudinal study recruiting children with inflammatory arthritis from four UK hospital centres. Included children are newly diagnosed, <or=16 years old with inflammatory arthritis of one or more joints, which has persisted for at least 2 weeks. Health service resource use data were collected as part of routine clinical care at study entry, 6 months and 1 year. Reference unit costs were applied to these data and the cost of treatment per child calculated for the first year from diagnosis. RESULTS: A total of 297 children attended a 12-month follow-up visit. The mean annual total cost per child was pound1649 (s.d. pound1093, range pound401- pound6967). The highest cost component was for appointments with paediatric rheumatologists. Mean total costs were highest for children with enthesitis-related, systemic JIA or extended oligoarthritis. CONCLUSIONS: In the first 12 months after diagnosis, children with all JIA disease subtypes consume large, but highly variable quantities of health service resources. Individual patient costs are required to reflect the wide variation in cost between patients and allow appropriate recouping of costs for contracted services and for assessing the economic impact of interventions.