BACKGROUND: Low Birth Weight (LBW) is prevalent in low-income countries. Even though the economic evaluation of interventions to reduce this burden is essential to guide health policies, data on costs associated with LBW are scarce. This study aims to estimate the costs to the health system and to the household and the Disability Adjusted Life Years (DALYs) arising from infant deaths associated with LBW in Southern Mozambique. METHODS AND FINDINGS: Costs incurred by the households were collected through exit surveys. Health system costs were gathered from data obtained onsite and from published information. DALYs due to death of LBW babies were based on local estimates of prevalence of LBW (12%), very low birth weight (VLBW) (1%) and of case fatality rates compared to non-LBW weight babies [for LBW (12%) and VLBW (80%)]. Costs associated with LBW excess morbidity were calculated on the incremental number of hospital admissions in LBW babies compared to non-LBW weight babies. Direct and indirect household costs for routine health care were 24.12 US$ (CI 95% 21.51; 26.26). An increase in birth weight of 100 grams would lead to a 53% decrease in these costs. Direct and indirect household costs for hospital admissions were 8.50 US$ (CI 95% 6.33; 10.72). Of the 3,322 live births that occurred in one year in the study area, health system costs associated to LBW (routine health care and excess morbidity) and DALYs were 169,957.61 US$ (CI 95% 144,900.00; 195,500.00) and 2,746.06, respectively. CONCLUSIONS: This first cost evaluation of LBW in a low-income country shows that reducing the prevalence of LBW would translate into important cost savings to the health system and the household. These results are of relevance for similar settings and should serve to promote interventions aimed at improving maternal care.