In this review, the economic aspects of pneumococcal pneumonia are analysed, including the costs, cost effectiveness and cost benefit of treatment and prevention. We identified eight cost-of-illness studies, 15 analyses comparing the costs of different treatment options and 15 economic evaluations of prevention that met our search criteria. The studies were conducted largely in Europe and the US. Most pertained to community-acquired pneumonia (CAP) in general, without specific analysis of pneumococcus-related illness. Many of the studies were considered to be of poor quality for the following reasons: comparison without randomisation or control variables, disregard of health outcomes, small sample size, restriction of costs to drug costs and vague or disputable sources of cost information. In the US, hospitalisation costs resulting from CAP can be estimated to be between US 7,000 dollars and US 8,000 dollars per admission or US 4 million dollars per 100,000 population. Hospitalisation costs are significant (representing about 90% of total costs), but are much lower in Europe than in the US (one-third to one-ninth of the US estimates in the UK and Spain, respectively). In general, economic studies of treatment for pneumococcal pneumonia are in line with clinical evidence. A drug with proven clinical effectiveness would also appear to be supported from an economic stand point. Furthermore, economic data support an early switch from an intravenous to an oral antibacterial, the use of quinolones for inpatients with CAP, and also the use of guidelines built on clinical evidence. Of all the possible preventive strategies for pneumococcal pneumonia, only vaccination has been subjected to economic evaluation. Pneumococcal polysaccharide vaccine seems relatively cost effective (and potentially cost saving) for those between 65 and 75 years of age, for military recruits and for HIV positive patients with a sufficiently high CD4 cell count. Evaluations of the pneumococcal conjugate vaccine (PCV) indicate the price of the vaccine to be the main determinant of cost effectiveness. As the current price is high (in the order of US 50 dollars per dose), the economic attractiveness of the universal PCV vaccination strategies hinges on the potential for price reductions and the willingness of decision makers to adopt a societal perspective.