OBJECTIVES: We examined the medical cost of bacteremic pneumococcal pneumonia (BPP) and non-bacteremic pneumococcal pneumonia (NBPP) for hospitalized patients in Korea, 2002 through 2005.  METHODS: We extracted epidemiology and cost data from the Korean national health insurance database. Patients with BPP were identified (A403, A408, A409, and A41) and NBPP (J12, J120 to J122,J128, J129,J13, J14, J15, J150 to J159, J16, J160, J168, J17, J170 to J173, J178, J18, J180 to J182, J188, J189) using International Classification of Diseases, 10th  revision. We estimated the total medical cost covered by insurance for BPP and NBPP among inpatients.RESULTS: During the 4-year period, we identified a total of 937,401 hospitalizations; 1,429 BPP inpatients and 935,972 NBPP inpatients. The population-based incidence rate of BPP hospitalization was 1.0/100,000 and NBPP hospitalization was 504.0/100,000 in the 4-year combined dataset. The total medical cost of hospitalization for all BPP and NBPP was US$774,587,273 (BPP: US$2,205,173 and NBPP: US$772,381,818). The mean medical cost for BPP was 1.9 fold higher (US$1,543±2265.3) compared with NBPP (US$802±1343.9).The mean length of stay (LOS) was 8.8 days (BPP: 12.2±13.1 and NBPP:8.8±8.5) and increased with age. The mean medical costs of the elderly aged >65 years were 3.5 fold higher compared with children <5 years among BPP (US$1508 vs USD 437), and 4.6 fold higher among NBPP (US$2,606 vs US$566). However, the number of hospitalizations among the elderly was lower than children (71.1%, 41.9%).CONCLUSIONS:BPP inpatient mean medical costs and average LOS were greater than for inpatients with NBPP. The mean medical costs for both were higher among the elderly aged >65 years compared with children <5 years. These results will be helpful to construct decision-analytic models for the cost-effectiveness of vaccine to prevent pneumococcal disease in Korea.