The aim of this study is to examine the sources of coding discrepancy for injury morbidity data and explore the implications of these sources for injury surveillance. An on-site medical record review and recoding study was conducted for 4373 injury-related hospital admissions across Australia. Codes from the original dataset were compared with the recoded data to explore the reliability of coded data and sources of discrepancy. The most common reason for differences in coding overall was assigning the case to a different external cause category with 9.5% assigned to a different category. Differences in the specificity of codes assigned within a category accounted for 7.8% of coder difference. Differences in intent assignment accounted for 3.7% of the differences in code assignment. In the situation where 8% of cases are misclassified by major category, the setting of injury targets on the basis of extent of burden is a somewhat blunt instrument. Monitoring the effect of prevention programs aimed at reducing risk factors is not possible in datasets with this level of misclassification error in injury cause subcategories. Future research is needed to build the evidence base around the quality and utility of the International Statistical Classification of Diseases and Related Health Problems (ICD) classification system and the application of use of this for injury surveillance in the hospital environment.