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Abstract: Objective: To estimate the cost of illness (COI) and health-related quality of life (HRQOL) of rheumatoid arthritis (RA) according to four different levels of functional severity. Methods: A face-to-face interview survey was administered to patients with RA recruited at the Rheumatology Clinic of Seoul National University Hospital. Direct costs (medical costs [treatment, drug, private physiotherapy, traditional Chinese medicine, other alternative medicine], nonmedical costs [travel, dietary supplements, auxiliary device, home assistance]), indirect costs (productivity loss due to job loss and sick leave), and deterioration in the HRQOL of patients with RA were measured. Factors associated with the COI and the HRQOL were analyzed by using multiple regression and multivariate logistic regression. Results: A total of 196 patients were enrolled for this study. As RA functional severity worsened, the total costs increased accordingly (class I: 4,230,204 Korean won, class II: 7,250,674 Korean won, class III: 8,046,434 Korean won, class IV: 8,206,215 Korean won). Direct costs also increased with the severity of the functional status, with a sharp decrease in class IV. The average HRQOL score was 0.49, showing an evident impact of RA severity (class I: 0.67, class II: 0.50, class III: 0.29, class IV: 0.23). Functional class and comorbidity were significant determinants of the COI and the HRQOL. Conclusion: Functional severity was a major factor associated with higher COI and lower HRQOL scores. Therefore, preventing the aggravation of functional severity is crucial for decreasing the COI and improving the HRQOL of patients with RA. [Copyright &y& Elsevier]