OBJECTIVES Gram-negative bacteria strains result in costly, and in some cases deadly, pneumonia related hospitalizations. Little information exists on acute hospital care and associated costs of gram negative pneumonia at a national level. Our objectives were to assess the prevalence of hospital stays for gram negative pneumonia, demographically and clinically characterize patients, assess hospital care patients received, identify associated costs, and quantify the clinical and economic burden of gram negative pneumonia in the United States. METHODS Using the 2005 HCUP database, sponsored by the Agency for Healthcare Research and Quality, we assessed relevant patient principal and secondary diagnoses, primary and secondary procedures, demographics, and hospital charges, as well as payer composition. An event-based approach was used to assess resource use and costs associated with all gram negative bacteria. Charges were adjusted to 2008 US dollars. RESULTS In 2005, 11,032 and 14,354 patients were admitted with principal and secondary diagnoses, respectively, of pneumonia due to gram-negative bacteria infection. Total annual per capita charges associated with these hospital stays were $37,010 per admission as principal diagnosis and $132,066 per admission as secondary diagnosis. This resulted in $328 million and $1.17 billion nationally per principal and secondary diagnoses admissions respectively. For all patients, the inpatient mortality rate was 13%, with nearly 60% of patients requiring additional care after their discharge. The most common procedures for all patients included ventilation (32%) and tracheotomies (11%). Pseudomonas was the most frequent and the most expensive gram negative strain, accounting for 53% of the total hospital stays for principal diagnosis patients and 43% for secondary diagnosis patients. CONCLUSIONS These results present the substantial hospital-specific burden of pneumonia due to gram-negative bacteria, and highlight the need to explore opportunities to decrease the infection rate and/or reduce their potency once infection occurs.