OBJECTIVE: This study aimed to analyse the association of the National Health and Medical Research Council fund allocations and several measures of burden of disease in Australia, and compare it to similar studies in the United States and Canada. METHODS: A cross-sectional study comparing disease-specific funding in two time periods (1998-2001 and 2002-03) with data from the Australian Burden of Disease study on four measures of burden of disease (incidence, mortality, years of life lost and disability-adjusted life years in 1996). This association was measured by correlation coefficients. With the use of these measures as predictor variables in a regression analysis, predicted funding was calculated and compared with actual funding. RESULTS: The highest correlation coefficients (r = 0.68-0.75) were exhibited by the DALYs and years of life lost to disability and the relation was significant at p < 0.0001 (1998 to 2003). Based on DALYs, the top five under-funded categories (1998-2001) were intentional injuries, cardiovascular diseases, mental disorders, unintentional injuries and chronic respiratory diseases. The top five over-funded categories were infectious and parasitic diseases, nervous system and sense organ disorders, malignant neoplasms, endocrine and metabolic disorders and genitourinary diseases. CONCLUSIONS: This study revealed a significant relation between NHMRC research funding and burden of disease measures and highlighted that comparison of actual and predicted funding based on different measures of disease can alter conclusions as to whether a disease is over- or under-funded.