Information regarding all patient and staff exposures to varicella-zoster virus (VZV) was prospectively accumulated from 1/1/86 to 12/31/86 at North Carolina Memorial Hospital. During this period of time 37 sources of exposure to VZV were reported: 10 outside and 27 within the hospital. Index cases for nosocomial exposure included: 12 patients with zoster, 9 patients with varicella, two staff with varicella, three visitors with varicella, and one staff with zoster. One hundred and twenty patients received nosocomial exposures; 28 had no history of VZV infection (23 per cent), of whom 11 were serosusceptible (39 per cent). Sources of nosocomial patient exposure included: other patients (85 per cent), staff (14 per cent), and a single visitor (1 per cent). More than 300 employees received nosocomial exposure; 158 had no history of VZV infection, of whom 49 were serosusceptible (31 per cent). Only a single employee and no patients developed clinical varicella as a result of nosocomial exposure. Costs associated with VZV control during 1986 totaled $55,934: $39,658 for work furloughs, $9,800 for serologies, $4,293 for patient isolation, $155 for varicella-zoster immune globulin, and $2,028 for infection control personnel time. These costs should be considered as part of any benefit-cost analysis of varicella immunization of health care personnel.