To compare the morbidity in patients with newly diagnosed clinically localized prostate cancer managed conservatively with the morbidity in a randomly selected age-matched background population with no history of prostate cancer. Patients younger than 75 y at diagnosis with newly diagnosed clinically localized prostate cancer reported to the Danish Cancer Registry in the period 1977-1992. Morbidity in patients and age-matched controls was extracted from The Danish Hospital Discharge Registry. Admissions were stratified by discharge diagnosis. Overall 4744 patients were hospitalized for 251,695 days within the first 10 y following diagnosis compared with 74,563 days in 4774 age-matched controls. The patients were admitted 6.7 (6.4-7.1) times more often than controls in the year following diagnosis, and 2.7 (2.6-2.8) times more often in the following 9 y. Excess morbidity declined over time. When prostate cancer-related admissions were excluded, the relative risk of admission was reduced to 1.35 (1.3-1.4) and 0.86 (0.83-0.89), respectively. The estimated costs associated with deferred therapy in patients with clinically localized prostate cancer exceeded the estimated cost in age-matched controls by approximately US$88 million, equivalent to an average extra cost per patient of approximately US$18,500. Patients with clinically localized prostate cancer managed conservatively had a significantly higher morbidity than age-matched controls due to admissions associated with prostate cancer. In future comparisons of treatment strategies, morbidity following treatment and impact on quality of life have to be included when evaluating the outcome.