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During 1998–2000, a large rubella outbreak was reported from Recife, the capital municipality of Pernambuco State, in northeastern Brazil. In 2002, a study was conducted to assess the burden of congenital rubella syndrome (CRS) after this outbreak.To describe the rubella outbreak, we analyzed data available from the National Notifiable Disease System. A retrospective record review for CRS was conducted at 6 maternity hospitals where 53% of Recife's resident live births occurred during 1999–2000 and 1 tertiary health care center. Suspected CRS cases were infants with any manifestation of CRS or maternal infection during pregnancy. Standard international definitions for compatible and confirmed CRS cases were used. Direct CRS costs were based on reimbursements by the National Health System.From October 1998 to July 2000, Recife reported 681 confirmed rubella cases. The highest incidence of rubella was among children 5–11 years of age (5.4 per 1000 population). Forty-five suspected CRS cases were identified; 29 were clinically compatible and 2 were laboratory-confirmed. The average annual incidence of CRS was 0.9 per 1000 live births during 1999–2000. Overall costs for the first year follow-up were estimated at US $61,824 in this cohort.High rubella vaccination coverage is required to prevent the severe congenital disabilities and high economic costs of CRS. Increased clinician awareness is critical for early CRS detection. Complete reporting is essential to evaluate the impact of vaccination programs and to document progress toward the goal of CRS elimination in the Americas by the year 2010.