Abstract Background Smoking is a public health problem in Mexico and worldwide; its economic impact on developing countries has not been well documented. The aim of this study was to assess the direct medical costs attributable to smoking incurred by lung cancer patients treated at the National Cancer Institute of Mexico (INCan). Methods The study was conducted at INCan in 2009. We carried out a cost of illness (COI) methodology, using data derived from an expert panel consensus and from medical chart review. A panel of experts developed a diagnostic-therapeutic guide that combined the hospital patient pathways and the infrastructure, human resources, technology, and services provided by the medical units at INCan. Cost estimates in Mexican pesos were adjusted by inflation and converted into US Dollars using the 2013 FIX exchange rate for foreign transactions (1 USD = 13.06 Mexican pesos). Results A 297 incident cases diagnosed with any type of lung cancer were analyzed. According to clinical stage, the costs per patient were 13,456; 35,648; 106,186; and 144,555 USD, for lung cancer stages I, II, III, and IV respectively. The weighted average annual cost/patient was and 139,801 USD and the average annual cost/patient that was attributable to smoking was 92,269 USD. This cost was independent of the clinical stage, with stage IV representing 96% of the annual cost. The total annual cost of smoking-related lung cancer at INCan was 19,969,781 USD. Conclusions The medical care costs of lung cancer attributable to smoking represent a high cost both for INCan and the Mexican health sector. These costs could be reduced if all provisions established in the Framework Convention of Tobacco Control of the World Health Organization were implemented in Mexico.