OBJECTIVES: To assess the effects of adverse drug events (ADEs) as the reason for admission on hospital length of stay (LOS) and hospitalization costs in US hospitals. METHODS:  The study used the Nationwide Inpatient Sample of the Healthcare Cost and Utilization Project for 2003-2009. ADEs were defined as drug poisoning due to inappropriate medication uses or errors and adverse effects from drugs administered. A case-control matching method was used to determine LOS and hospitalization costs attributable to ADEs. For each case patient, one control patient was matched based on sex, age(±5 years), race, exact diagnosis, same hospital and same calendar year of discharge. LOS and hospitalization costs attributable to ADEs were estimated using the recycled prediction method. This method predicted outcomes for patients with ADEs by calculating outcomes using estimated coefficients from all sample using generalized linear model after adjusting for the study variables. Then, LOS and hospitalization costs attributable to ADEs were defined as the differences between the predicted outcomes assuming the patients with ADEs as having ADEs and the predicted outcomes assuming the patients with ADEs not having ADEs. All costs were converted to 2011 US dollars using consumer’s price indices and calculated per-discharge. RESULTS: A total of 6076 patients with ADEs were matched with control patients. The matched control patients had a mean LOS of 4.50 days versus 4.85 (p<0.05) for patients with ADEs. The average hospitalization cost for control patients was $7648 compared to $7785 for patients with ADEs. The LOS attributable to ADEs was 0.36 days per admission and the mean hospitalization cost attributable to ADEs was $550 per admission.   CONCLUSIONS:  The incidence of ADE significantly increases LOS and hospitalization costs. To reduce these outcomes, it is necessary that a systematic approach to improve drug use process is undertaken including the monitoring of ADEs as an important outcome of pharmacotherapy.