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Seasonal influenza epidemics have a substantial public health and economic burden in the United States (US). On average, over 200,000 people are hospitalized and an estimated 23,000 people die from respiratory and circulatory complications associated with seasonal influenza virus infections each year. Annual direct medical costs and indirect productivity costs across the US have been found to average respectively at $10.4 billion and $16.3 billion. The objective of this study was to estimate the economic impact of severe influenza-induced illness on the US Veterans Affairs population. The five-year study period included 2010 through 2014. Influenza-attributed outcomes were estimated with a statistical regression model using observed emergency department (ED) visits, hospitalizations, and deaths from the Veterans Health Administration of the Department of Veterans Affairs (VA) electronic medical records and respiratory viral surveillance data from the Centers for Disease Control and Prevention (CDC). Data from VA's Managerial Cost Accounting system were used to estimate the costs of the emergency department and hospital visits. Data from the Bureau of Labor Statistics were used to estimate the costs of lost productivity; data on age at death, life expectancy and economic valuations for a statistical life year were used to estimate the costs of a premature death. An estimated 10,674 (95% CI 8,661-12,687) VA ED visits, 2,538 (95% CI 2,112-2,964) VA hospitalizations, 5,522 (95% CI 4,834-6,210) all-cause deaths, and 3,793 (95% CI 3,375-4,211) underlying respiratory or circulatory deaths (inside and outside VA) among adult Veterans were attributable to influenza each year from 2010 through 2014. The annual value of lost productivity amounted to $27 (95% CI $24-31) million and the annual costs for ED visits were $6.2 (95% CI $5.1-7.4) million. Ninety-six percent of VA hospitalizations resulted in either death or a discharge to home, with annual costs totaling $36 (95% CI $30-43) million. The remaining 4% of hospitalizations were followed by extended care at rehabilitation and skilled nursing facilities with annual costs totaling $5.5 (95% CI $4.4-6.8) million. The annual monetary value of quality-adjusted life years (QALYs) lost amounted to $1.1 (95% CI $1.0-1.2) billion. In total, the estimated annual economic burden was $1.2 (95% CI $1.0-1.3) billion, indicating the substantial burden of seasonal influenza epidemics on the US Veterans Affairs population. Premature death was found to be the largest driver of these costs, followed by hospitalization.