The objective of this study was to estimate the national medical costs associated with gestational diabetes mellitus (GDM) in 2007. We analyzed the National Hospital Discharge Survey to estimate the national prevalence of GDM. Using Poisson regression analysis with medical claims for about 27,000 newborns and their mothers, we estimated rate ratios that reflect the increase in use of health care services associated with GDM. Combining GDM prevalence rates with these rate ratios, we calculated etiological fractions that reflect the proportion of national health care resource use associated with GDM. We then multiplied these fractions by estimates of national health care use and costs in 2007. GDM prevalence increases with age, rising from 1.3% of pregnancies of women younger than age 21 to 8.7% of pregnancies of women older than age 35. For the estimated 180,000 GDM pregnancies resulting in delivery, average expenditures increased $3,305 per pregnancy plus $209 in the newborn's first year of life. GDM increased national medical costs by $636 million in 2007-$596 million for maternal costs and $40 million for neonatal costs. Approximately $230 million (36%) of GDM-related medical costs are covered by government programs (primarily Medicaid), $355 million (56%) are covered by private insurers, and $51 million (8%) are covered by self-pay and charity care. GDM imposes a significant economic burden. These estimates of the economic burden of GDM are likely conservative because we focus on near-term medical costs, omitting the increased risk for long-term sequelae.