BACKGROUND: Malaria causes significant mortality and morbidity in sub-Saharan Africa (SSA), especially among children less than five years of age (U5 children). Although the economic burden of malaria in this region has been assessed previously, the extent and variation of this burden remains unclear. This study aimed to estimate the economic costs of malaria in U5 children in three countries (Ghana, Tanzania and Kenya). METHODS: Health system and household costs previously estimated were integrated with costs associated with co-morbidities, complications and productivity losses due to death. Several models were developed to estimate the expected treatment cost per episode per child, across different age groups, by level of severity and with or without controlling for treatment-seeking behaviour. Total annual costs (2009) were calculated by multiplying the treatment cost per episode according to severity by the number of episodes. Annual health system prevention costs were added to this estimate. RESULTS: Household and health system costs per malaria episode ranged from approximately US$ 5 for non-complicated malaria in Tanzania to US$ 288 for cerebral malaria with neurological sequelae in Kenya. On average, up to 55% of these costs in Ghana and Tanzania and 70% in Kenya were assumed by the household, and of these costs 46% in Ghana and 85% in Tanzania and Kenya were indirect costs. Expected values of potential future earnings (in thousands) lost due to premature death of children aged 0-1 and 1-4 years were US$ 11.8 and US$ 13.8 in Ghana, US$ 6.9 and US$ 8.1 in Tanzania, and US$ 7.6 and US$ 8.9 in Kenya, respectively. The expected treatment costs per episode per child ranged from a minimum of US$ 1.29 for children aged 2-11 months in Tanzania to a maximum of US$ 22.9 for children aged 0-24 months in Kenya. The total annual costs (in millions) were estimated at US$ 37.8, US$ 131.9 and US$ 109.0 nationwide in Ghana, Tanzania and Kenya and included average treatment costs per case of US$ 11.99, US$ 6.79 and US$ 20.54, respectively. CONCLUSION: This study provides important insight into the economic burden of malaria in SSA that may assist policy makers when designing future malaria control interventions.