In a cohort of children with sickle cell disease (SCD) and vaso-occlusive pain visits served through South Carolina's Medicaid system over a 6-year period (N 5 523), we compared the number of vaso-occlusive pain or acute chest syndrome (ACS)/pneumonia episodes, and outpatient or acute service costs in those treated or not treated with hydroxyurea (HU). HU may be an underused intervention for SCD in this practice setting, for a variety of reasons. Treatment with HU varied greatly, appears to have been administered to more severely ill children, but was associated with a reduction in vaso-occlusive pain episodes, hospitalizations,and total costs of care within the HU cohort during a 2-3 year period of active HU treatment. Those receiving care through specialized SCD clinics were less likely to have pain or acute care episodes(RR 5 0.79, P < 0.0001; RR 5 0.90, P 5 0.01). Compared with the non-HU cohort, the HU group evinced a significantly higher risk of experiencing vaso-occlusive pain episodes (RR 5 3.32, P < 0.0001)and ACS/pneumonia episodes (RR 5 2.66, P < 0.0001), and higher outpatient,inpatient/emergency, and total service costs (RR 5 1.85, 2.11,2.10, and P < 0.0001, respectively) over time. HU is clinically effective in reducing pain episodes, hospitalizations, and total care costs, but those receiving it might be more severely ill.