We identified, by diagnostic categories, the iatrogenic and financial costs that arise from hospitalizing febrile infants 60 days of age or younger. Thirty-seven (19.5%) of all admissions resulted in 48 separate complications. Twenty-nine (60.4%) of these complications were preventable, and six complications (12.5%) occurred in infants who probably did not require hospitalization for therapy. Twenty-four (50%) of all complications resulted from intravenous therapy. In addition to the complications, 26 diagnostic misadventures were identified. The average length of hospitalization for all infants was 7.0 days, with a range of two to 28 days. The average cost of hospitalization in 1979-80 dollars was $2,130 per infant, with a range from $6,345 for those infants with bacterial meningitis to $1,480 for those infants with aseptic meningitis. On the average, 25.6% of the bill was for diagnostic studies and 8.3% for physician fees.