OBJECTIVES:  Rheumatoid arthritis (RA) is associated with poor quality of life and higher healthcare cost. This study aimed to assess the direct medical costs of rheumatoid arthritis (RA) and to characterize predictors of these costs.  METHODS: A total of 349 RA patients were randomly selected by stratified two-stage sampling from the China Basic Health Insurance database in 2009. All information of patient demographic characters, clinical and costs were collected for the analysis. We used generalized estimating equations to examine potential predictors of the costs. RESULTS: Among 349 RA patients (mean age = 58.9 years; 67% female), The mean length-of-stay was 19.0 days for RA patients with basic medical insurance for urban employees and 15.5 days for those with basic medical insurance for urban residents. The average inpatient cost was RMB8521.5 yuan (median: 6608.7, IQR: 4223.5-10383.3) and the average drug cost accounts for 49.95% of the total cost (mean: 4256.9; median: 3681.7, IQR: 1973.7-5295.3). The multiple linear regressions showed that the hospital cost of Patients with basic medical insurance for urban employees had 39.6% higher costs than those with basic medical insurance for urban residents(P<0.001). Patients from tertiary hospitals had 97.8% higher costs than those from primary hospitals; (P <0.001) and patients from municipalities had 46.0% higher costs than those from prefecture-level cities.( P <0.01). CONCLUSIONS: Patients with RA is associated with high hospital costs. Costs are now driven predominantly by the cost of drugs, primarily biologic agents. and sociodemographic characteristics such as types of health insurance and levels of hospitals also play an important role in determination of costs.