Although the health sequelae of smoking during pregnancy are well documented, relatively little is known about its long-term economic implications. The objective of this study was to analyse individual-level data on maternal smoking behaviour and sociodemographic, perinatal and resource utilisation variables in order to estimate the association between smoking during pregnancy and hospital inpatient service utilisation and costs through the first 5 years of the infant's life. Data from the Oxford Record Linkage Study, a collection of birth registrations, death certificates and statistical abstracts of hospital inpatient and day case admissions formed the basis of the investigation. The study population comprised all infants born to women who both lived and delivered in Oxfordshire or West Berkshire during the period 1 January 1980-31 December 1989 (n = 119,028). The cost of each hospital admission, including the initial birth admission, was estimated by multiplying the length of stay by the per diem cost of the respective specialty (pound 1998-1999 sterling). The effect of maternal smoking behaviour on cumulative 5-year hospital inpatient service utilisation and costs was analysed in a series of multivariate analyses, taking account of confounding clinical and sociodemographic factors. Infants born to women who reported smoking during pregnancy were hospitalised for a significantly greater number of days than infants born to women who had either never smoked or had smoked in the past (P < 0.0001). Over the first 5 years of life, the adjusted mean cost difference was estimated at pound sterling 462 (95%CI: pound sterling 353-pound sterling 571) when infants born to women who smoked at least 20 cigarettes per day were compared to infants of non-smoking mothers, and pound sterling 307 (95%CI: pound sterling 221-pound sterling 394) when infants born to women who smoked 10-19 cigarettes per day were compared to infants of non-smoking mothers (P < 0.0001). The results of this study should add an economic dimension to the importance of providing smoking cessation services for pregnant women.