Objective: It aims to investigate the impact of tobacco use on Catastrophic Health Expenditure (CHE), providing a ba- sis for government investment in tobacco control and the formulation of effective anti-smoking policies. Methods: Based on the 2018 National Health Service Survey data from Shandong Province, the incidence rate, average overshoot gap, and relative overshoot gap of CHE under different thresholds for different household were calculated to analyze the distribution of tobacco-related diseases for smoking households. Results: In 2018, the overall incidence rate of CHE for current smoking households in Shandong Province was 13.56% (at a 40% threshold), with average overshoot gap and relative overshoot gap of 4.61% and 34.02%, respectively. As income levels decreased, the overall incidence rate of CHE increased. Rural current smoking households had higher overall incidence rates of CHE, average overshoot gap, and relative overshoot gap than urban households. Smoking households that experienced CHE were pri- marily afflicted with chronic diseases. Conclusion: The CHE risk is significantly higher in smoking households, particularly in rural and low-income households. It is recommend implementing a diverse range of promotional methods to strengthen anti-smoking health education, with a specific focus on intensifying awareness of the dangers of tobacco use in rural areas. Additionally, it is suggested to further increase tobacco taxes so as to reduce the motivation for smoking among low-income populations.