Pneumonia, meningitis, and sepsis place a significant economic burden on health care systems, particularly in developing countries. This study estimates treatment costs for these diseases in health facilities in the Northern Areas of Pakistan. Health facility resources are organized by categories--including salaries, capital costs, utilities, overhead, maintenance and supplies--and quantified using activity-based costing (ABC) techniques. The average cost of treatment for an outpatient case of child pneumonia is dollar 13.44. For hospitalized care, the health system spent an average of dollar 71 per episode for pneumonia, dollar 235 for severe pneumonia, and dollar 2,043 for meningitis. These costs provide important background information for the potential introduction of the conjugate Haemophilus influenzae type b (Hib) and Streptococcus pneumoniae vaccines in Pakistan.