OBJECTIVE: Diabetic foot ulcers (DFU) are a common and costly problem for patients with diabetes. This study was undertaken to identify patients with DFU who required inpatient management in 1995 and their readmissions for this problem over a five-year period, as well as the resulting costs. METHODS: The index DFU admission was identified in the 1995 Massachusetts (MA) inpatient database by means of primary and secondary ICD-9 diagnosis codes, excluding cases with any type of lower extremity amputation or arterial graft. Readmissions for DFU care with and without lower leg osteomyelitis were tracked over five years (1995-1999) by means of a unique patient identifier. MA costs, adjusted to national values, were derived from the all payer state discharge databases. All accommodations, ancillaries and physician care were included in the cost estimates, which were adjusted for medical inflation, cost-to-charge ratios, and reported in 2000 US$. RESULTS: Males comprised 59% of the index group of 542 patients. The mean age was 65 years (range: 23-99 years) and 1.3% died during the index admission. Of the survivors, 53% were readmitted at least once (mean 2.1, range: 1-18) within five years for DFU management with or without osteomyelitis for a total of 9,143 inpatient days, including the index admission. The cumulative five-year cost for the index admission and all readmissions was estimated at $8.5 million. CONCLUSIONS: A substantial number of patients with DFU requiring inpatient management can be expected to incur additional DFU-related hospital costs within five years. This is a conservative cost estimate, as post-acute care costs, such as rehabilitation and home health care services, were not included. This information supports the importance of diligent diabetes management in hopes of preventing or delaying neuropathic complications, such as DFU, and programs designed to detect and treat DFUs at an early stage.