We analysed costs and outcomes of tuberculosis care for patients in a traditional Russian tuberculosis control system, using 3-year retrospective cohort data. Of 1749 cases at 3 years of follow-up, 65% were cured, 11.3% (198/1749) still had 'active' or 'chronic' disease, 10.3% had transferred out of the local civilian health care system and 12.7% had died. The mean cost of managing one case over 3 years was 886 US dollars: 1,078 US dollars for bacteriologically confirmed (BK+) cases and 718 US dollars for bacteriologically unconfirmed (BK-) cases. Approximately 60% of treatment costs were incurred in the first 12 months and 40% incurred in the remaining 2 years. Around 60% of the total cost was accounted for by hospital inpatient care. The cost, treatment and outcome of BK+ and BK- cases differed substantially. The cost of treating BK+ cases was 50% higher than treating BK- cases due to higher hospitalization rates and the additional cost of managing BK+ cases that become 'chronic'. While BK+ cases accounted for 55% of total health expenditure on tuberculosis, the share of BK- cases was 45% of the total - due to hospitalization and lengthy periods of follow up. The costs of treating tuberculosis in the Russian tuberculosis control system are very high compared with other high-burden countries due to hospitalization policies and lengthy case management periods. Much of this expenditure can be avoided if the WHO-recommended DOTS strategy is implemented. In particular, the proportion of expenditure for BK- cases is surprisingly high and can be avoided as most of these patients do not need hospitalizing or lengthy periods of follow-up.