Background: Evidence-based consensus guidelines recommend only observation for men with low-risk prostate cancer and life expectancy less than 10 years. This report describes the incidence, drivers, cost, and morbidity of overtreatment of low-risk prostate cancer within the United States. Methods: The SEER-Medicare Program was used to identify 11,744 men aged 66 years or older diagnosed with low-risk prostate cancer in 2004 through 2007. Overtreatment of prostate cancer was defined as definitive treatment of a patient with a life expectancy of less than 10 years. Expected survival was estimated using NCCN methodology. Costs were the amount paid by Medicare in years after minus year before diagnosis. Toxicities were relevant Medicare diagnoses/interventions. P values are 2-sided. Results: Of 3001 men with low-risk prostate cancer and a life expectancy of less than 10 years, 2011 men (67%) were overtreated. On multivariable logistic regression, overtreated men were more likely to be married (odds ratio [OR], 1.29; 95% CI, 1.05–1.59; P=.02), reside in affluent regions (P<.001), and harbor more advanced disease at diagnosis (P<.001). Two-year toxicity was greater in overtreated patients (P<.001). Relative to active surveillance/watchful waiting/observation, the median additional cost per definitive treatment was $18,827 over 5 years; the cumulative annual cost attributable to overtreatment in the United States was $58.7 million. The ability to avoid treating the 80% of men with low-grade disease who will never die of prostate cancer would save $1.32 billion per year nationally. Conclusions: Overtreatment of low-risk prostate cancer is partially driven by sociodemographic factors and occurs frequently, with marked impact on patient quality of life and health-related costs.