OBJECTIVES: Pregnant women with diabetes report high rates of neonatal mortality and morbidity. The costs of resulting interventions are potentially substantial. This study investigated health outcomes and inpatient costs in pregnant women with type 1 diabetes. METHODS: This analysis utilised a cohort of 302 pregnant women with type 1 diabetes, enrolled before 10 weeks gestation, with HbA1C £ 8% at confirmation of pregnancy and for whom birth outcome was known. Subjects were participating in a randomised study of basal-bolus insulin regimens, with doses titrated in line with the American Diabetes Association (ADA) guidelines. Outcomes recorded included major maternal hypoglycaemia, neonatal hypoglycaemia, obstetric complications, congenital malformations, foetal loss, birth before 37 weeks gestation, birth weight >4000g, and other adverse events if life threatening or requiring hospitalisation. Resulting inpatient costs were estimated from the perspective of the UK National Health Service. RESULTS: The percentage of subjects reporting major maternal hypoglycaemia was 29%, neonatal hypoglycaemia 53%, foetal loss 11%, preterm delivery 22%, obstetric complications 33%, congenital malformations 5%, birth weight >4000g 20%, and other adverse events 12%. The mean inpatient cost per subject was £4589 (SD £3961). The main costs were admission for pre-term infants (£3089, SD £3508), adverse events and obstetric complications (£532, SD £839), and normal delivery costs (£968, SD £328). The mean cost was around four times the average cost of delivery in a UK hospital (£1078). In England and Wales around 5250 women with type 1 diabetes give birth every year. The excess cost of these births to the NHS is around £18.4 million per annum. CONCLUSION: Inpatient costs are high in pregnant women with type 1 diabetes. Successful intervention in this group could improve health outcomes and substantially reduce cost.