Drivers distracted by the app and pedestrians walking out without looking contributed to a huge rise in accidents.
One PokeStop - real-world locations where players could net prizes - and found incidents rocketed.
Within 100 metres of the site the accident rate soared in July - when the augmented reality app was downloaded over 100million times.
When the craze trailed off - some 148 days later - the accident levels returned to normal, according to researchers.
And scientists from Purdue University in Indiana reckon it could have accounted for 145,000 extra accidents across America.
Injuries rose by an estimated 29,000 with 256 deaths using data from thousands of police reports.
The report stated: "We estimate the total incremental county-wide cost of users playing Pokémon GO while driving, including the value of the two incremental human lives lost, to be in the range of $5.2million to $25.5million over only the 148 days following the introduction of the game.
"Extrapolation of these estimates to nation-wide levels yields a total ranging from $2 to $7.3billion for the same period."