The inflation is considered a great challenge to the economy of the most countries in the world, and that is because of its negative effects of the economic growth rate. This study investigates the impact of cost of production on the inflation in Syrian Arab Republic during the period (1996-2010) by using modern standard ways. The results of this study showed that the reasons for increasing the inflation rate in Syrian economy are domestic intermediate goods and intermediate imported goods. Regression analysis has been used to estimate the effects of the output of the real wage and the cost of production on GDP implicit price deflator. It has been concluded that the cost of production affects the implicit price deflator at significance level less than 0.05.