Inpatient mortality has increasingly been used as an hospital outcome measure. Comparing mortality rates across hospitals requires adjustment for patient risks before making inferences about quality of care based on patient outcomes. Therefore it is essential to dispose of well performing severity measures. The aim of this study is to evaluate the ability of the All Patient Refined DRG system to predict inpatient mortality for congestive heart failure, myocardial infarction, pneumonia and ischemic stroke. Administrative records were used in this analysis. We used two statistics methods to assess the ability of the APR-DRG to predict mortality: the area under the receiver operating characteristics curve (referred to as the c-statistic) and the Hosmer-Lemeshow test. The database for the study included 19,212 discharges for stroke, pneumonia, myocardial infarction and congestive heart failure from fifteen hospital participating in the Italian APR-DRG Project. A multivariate analysis was performed to predict mortality for each condition in study using age, sex and APR-DRG risk mortality subclass as independent variables. Inpatient mortality rate ranges from 9.7% (pneumonia) to 16.7% (stroke). Model discrimination, calculated using the c-statistic, was 0.91 for myocardial infarction, 0.68 for stroke, 0.78 for pneumonia and 0.71 for congestive heart failure. The model calibration assessed using the Hosmer-Leme-show test was quite good. The performance of the APR-DRG scheme when used on Italian hospital activity records is similar to that reported in literature and it seems to improve by adding age and sex to the model. The APR-DRG system does not completely capture the effects of these variables. In some cases, the better performance might be due to the inclusion of specific complications in the risk-of-mortality subclass assignment.