OBJECTIVE: Little is known about the long-term costs of lupus nephritis (LN). The costs were compared between patients with and without LN using multistate modeling. METHODS: Patients from 32 centers in 11 countries were enrolled in the Systemic Lupus International Collaborating Clinics inception cohort within 15 months of diagnosis and provided annual data on renal function, hospitalizations, medications, dialysis, and selected procedures. LN was diagnosed by renal biopsy or the American College of Rheumatology classification criteria. Renal function was assessed annually using the estimated glomerular filtration rate (GFR) or estimated proteinuria. A multistate model was used to predict 10-year cumulative costs by multiplying annual costs associated with each renal state by the expected state duration. RESULTS: A total of 1,545 patients participated; 89.3% were women, the mean ± age at diagnosis was 35.2 ± 13.4 years, 49% were white, and the mean followup duration was 6.3 ± 3.3 years. LN developed in 39.4% of these patients by the end of followup. Ten-year cumulative costs were greater in those with LN and an estimated glomerular filtration rate (GFR) <30 ml/minute ($310,579 2015 Canadian dollars versus $19,987 if no LN and estimated GFR >60 ml/minute) or with LN and estimated proteinuria >3 gm/day ($84,040 versus $20,499 if no LN and estimated proteinuria <0.25 gm/day). CONCLUSION: Patients with estimated GFR <30 ml/minute incurred 10-year costs 15-fold higher than those with normal estimated GFR. By estimating the expected duration in each renal state and incorporating associated annual costs, disease severity at presentation can be used to anticipate future health care costs. This is critical knowledge for cost-effectiveness evaluations of novel therapies.