OBJECTIVES:  Trauma, surgery, and abnormalities in hemostasis are common causes of excessive bleeding and the need for blood transfusion.  Factors such as acute shortages in blood inventory, rising costs of blood products, and inherent risks associated with blood transfusion increasingly warrant limiting the inappropriate use of blood and broader adoption of blood conservation techniques and strategies.  The aim of this study was to estimate morbidity, mortality, and resource-use associated with blood transfusion in hospitalized patients in the U.S. in 2004.  METHODS:  The 2004 Healthcare Cost and Utilization Project Nationwide Inpatient Sample was queried to group discharges into Transfused and Non-Transfused cohorts based on International Classification of Diseases, Ninth Revision, Clinical Modification procedure codes for blood transfusion.  Average differences between cohorts in length of stay (LOS) and total hospital charges were calculated.  Odds ratios were calculated for mortality and postoperative infection rates.  Results are reported after controlling for age, gender, co-morbidities, admission type, and diagnosis related group.  RESULTS:  LOS, charges, mortality, and infection were significantly higher in transfused patients than in non-transfused patients.  The average difference in LOS was 3.0 days higher among the Transfused cohort (p<0.0001; F test) and average difference in charges were $8476 higher for the Transfused cohort (p<0.0001; F test) compared to the Non-Transfused cohort.  Additionally, the Transfused cohort had a 1.6 times higher odds of death (p<0.0001; Rao-Scott chi-square test) and a 2.3 times higher odds of infection (p<0.0001; Rao-Scott chi-square test) compared to the Non-Transfused cohort.  CONCLUSIONS:  Our study demonstrates that hospitalized patients receiving blood transfusions remain at risk for experiencing adverse clinical and economic outcomes.  Raising awareness about the potential negative clinical and economic outcomes of blood transfusion may encourage the adoption of blood conservation techniques and strategies, reduce the need for transfusions, and ultimately, yield meaningful clinical benefits at the individual patient level.