OBJECTIVE. The objective of this study was to estimate national hospital costs for infant admissions that are associated with preterm birth/low birth weight.METHODS. Infant (35 million hospital discharges nationwide. Hospital costs, based on weighted cost-to-charge ratios, and lengths of stay were calculated for preterm/low birth weight infants, uncomplicated newborns, and all other infant hospitalizations and assessed by degree of prematurity, major complications, and expected payer.RESULTS. In 2001, 8% (384200) of all 4.6 million infant stays nationwide included a diagnosis of preterm birth/low birth weight. Costs for these preterm/low birth weight admissions totaled $5.8 billion, representing 47% of the costs for all infant hospitalizations and 27% for all pediatric stays. Preterm/low birth weight infant stays averaged $15100, with a mean length of stay of 12.9 days versus $600 and 1.9 days for uncomplicated newborns. Costs were highest for extremely preterm infants (CONCLUSIONS. Costs per infant hospitalization were highest for extremely preterm infants, although the larger number of moderately preterm/low birth weight infants contributed more to the overall costs. Preterm/low birth weight infants in the United States account for half of infant hospitalization costs and one quarter of pediatric costs, suggesting that major infant and pediatric cost savings could be realized by preventing preterm birth.