BACKGROUND: Inappropriate antibiotic use is generally considered to be the primary cause of antibiotic resistance in the community. Multiple economic factors, at the level of physicians, patients, healthcare organizations, and pharmaceutical companies, foster poor antibiotic use. OBJECTIVE: To describe the influence of economic factors on the use and development of antibiotics and to evaluate the extent to which the cost of resistance is important in the economic evaluation of antibiotic products. DATA SOURCES: Literature identified through MEDLINE (1966-May 2001), bibliographies from relevant articles, government reports, and proceedings from conferences about antibiotic resistance. DATA SYNTHESIS: Economic factors at all levels of the healthcare system contribute to the inappropriate use of antibiotics in the community setting. Relatively little economic research has been published on antibiotic resistance, and very few cost-effectiveness analyses of antibiotic treatment alternatives have explicitly included the cost of resistance. CONCLUSIONS: A better understanding of economic factors that influence the prescribing, marketing, and development of antibiotics could lead to more successful efforts at curtailing the growth of antibiotic resistance in the community setting.