OBJECTIVE To develop a model for calculating the cost of a four-year undergraduate medical education at the University of Virginia School of Medicine (UVA) in 1994-95. METHODS All data were based on faculty contact hours (FCHs), the primary driver of cost. (An FCH was an hour during which a faculty member was actively teaching.) First- and second-year data were derived from a published curriculum schedule. Third-year data were derived from hours spent in each clerkship and a series of calculations to assess direct teaching time in each clerkship accurately. Fourth-year data were modeled on an artificial but typical program consisting of the required clerkship in neurology, a two-day course in advanced cardiac life support, and seven elective blocks; electives were chosen based on relative overall popularity. The number of full-time-equivalent (FTE) faculty required was calculated. The salary costs of UVA full-time faculty were calculated. Other total direct costs, including the costs of support and administrative services as well as the costs of the educational contributions of housestaff and contract faculty, were calculated. The overall cost, including direct and indirect costs, was calculated. An average of 139 students per year was assumed. RESULTS The total number of FCHs was just under 100,000. The number of FTE faculty required was 223. UVA faculty salary and fringe benefits totaled $29,400,000. The costs of support and administrative services totaled $4,100,000; the costs of housestaff and contract faculty totaled $2,300,000. The overall educational costs totaled $49,600,000. CONCLUSIONS The overall cost of a four-year medical education at UVA was $357,000 per student. Although the process of calculating this cost was complex and, at times, based on assumptions open to debate, the model developed can be applied to any medical education setting.