OBJECTIVES: To estimate and compare cost-of-illness (COI) and health-related quality of life (HRQOL) of rheumatoid arthritis (RA) and ankylosing spondylitis (AS) in South Korea. METHODS: Patients with RA (n=196) and AS (n=191) were surveyed by face-to face interviews at the Rheumatology Clinic of Seoul National University Hospital. Direct costs [medical costs (treatment, drug, private physiotherapy, traditional Chinese medicine, other alternative medicine), non-medical costs (travel, dietary supplements, auxiliary device, home assistance)], indirect costs (productivity loss due to job loss and sick leave) and deterioration in HRQOL of RA and AS patients were measured. HRQOL was assessed using KEQ-5D. Factors associated with COI and HRQOL were analyzed using multiple regression and multivariate logistic regression. RESULTS: COI of AS patients was more than double compared to that of RA patients (RA: 6,446,376 Korean Won, AS: 12,433,629 Korean Won) but HRQOL of RA patients was lower than that of AS patients (RA: 0.49, AS: 0.62). As functional severity worsened in both diseases, the total costs increased accordingly (RA: functional class (FC) I: 4,230,204 Korean Won, FC II: 7,250,674 Korean Won, FC III: 8,046,434 Korean Won, FC IV: 8,206,215 Korean Won, AS: FC I: 8,125,096 Korean Won, FC II: 13,995,292 Korean Won, FC III, IV: 30,118,247 Korean Won) and the HRQOL scores decreased (RA: FC I: 0.67, FC II: 0.50, FC III: 0.29, FC IV: 0.23, AS: FC I: 0.72, FC II: 0.61, FC III, IV: 0.24). Functional severity was the major determinant of COI and HRQOL in RA and AS. CONCLUSIONS: Although the HRQOL of AS patients was not as low as that of RA patients, the COI of AS patients was higher than that of RA patients. Considering the relatively low HRQOL and relatively low medical costs of RA patients, re-examination of reimbursement plan of Korean National Health Insurance is needed to figure out this problem.