The important role of genetics in pediatric illness has been increasingly recognized, but the true impact has not been well delineated. An important study of pediatric inpatient admissions to a children's hospital in 1978 found a genetic basis for disease in just less than half of admitted patients. We sought to update this study in light of current hospitalization practices and new knowledge about genetics. We systematically reviewed the records of 5,747 consecutive admissions (4,224 individuals), representing 98% of patients admitted in 1996 to Rainbow Babies and Children's Hospital (Cleveland, OH). Each patient was assigned to one of five groups on the basis of the presence or absence of an underlying chronic medical condition and whether that condition had a genetic basis or susceptibility. An underlying disorder with a significant genetic component was found in 71% of admitted children. The vast majority (96%) of underlying chronic disorders in children in this study were either clearly genetic or had a genetic susceptibility. Total charges for 1996 were >$62 million, of which $50 million (81%) was accounted for by disorders with a genetic determinant. The 34% of admissions with clearly genetic underlying disorders accounted for 50% (>$31 million) of the total hospital charges. The mean length of stay was 40% longer for individuals with an underlying disease with a genetic basis than for those with no underlying disease. Charges and length of stay were similar for children with underlying chronic disorders, regardless of the cause. This study begins to quantify the enormous impact of genetic disease on inpatient pediatrics and the health care system. Additional study and frank public discourse are needed to understand the implications on the future health care workforce and on the utilization of health care resources.