OBJECTIVES Japanese version of Beers criteria (JP-BC) for potentially inappropriate medications in elderly patients was developed by consensus among nine specialists in order to reflect regional medical practice and available medications. The prevalence of, and risk factors and medical costs associated with JP-BC were examined. METHODS A cross-sectional study was conducted using health insurance claims data in Japan. Patients aged 65 years or older and had a pharmacy claim between October 2006 and September 2007 were selected and the use of JP-BC was identified. Associations with patient demographics, health care utilization patterns and co-morbidities were assessed using logistic regression models. Medical costs associated with the JP-BC were also examined using generalized linear models. RESULTS Among 6991 old patients, 41.2% were used one of the JP-BC. Commonly used medications were H2 blockers (19.5%), benzodiazepines (10.9%) and anticholinergics and antihistamines (7.8%). Patients with multiple medications, long-term inpatient care and multiple chronic conditions including gastrointestinal and cardiovascular diseases were more likely to use JP-BC. Mean annual cost for JP-BC users was 517,516 yen (5,625 US$), which was 2.4 times higher than that in non JP-BC users. Cost differences were still observed after risk adjustment using Charlson or Elixhauser co-morbidities. High medical costs among JP-BC users were partly explained by their high likelihood of multiple medications and long-term inpatient care. CONCLUSIONS The prevalence of potentially inappropriate medication use in Japan was relatively higher than those previously reported in other countries even though regional specific medications were considered. Drug utilization reviews using the criteria must be promoted to increase awareness of inappropriate pharmaceutical cares among elderly and control medical costs.