The objective of this study was to identify the direct cost and length of hospitalization of diabetes-related lower extremity amputations among Hispanics, African Americans, non-Hispanic whites, and Asians. The authors used a database from the office of Statewide Planning and Development in California that identified all hospitalizations for lower extremity amputations in the state in 1991. Amputation level was defined by the ICD-9-CM codes 84.11-84.18. The total hospital charges for diabetes-related lower extremity amputations for the state of California in 1991 was $141 million. The mean hospital charge (HC) per patient with all ethnic groups combined was $27,930; and the mean length of stay (LOS) was 15.9 days. African Americans had significantly higher mean charges ($32,383) and longer stays (17.3 days) compared to all other ethnic groups (p < .05). Toe-level amputations had lower HC (p < .05) and LOS (p < .01) than other amputation levels for all race groups. One-quarter of the population received multiple amputations during their hospital stay. These patients incurred significantly higher hospital charges ($44,731) and stayed in the hospital longer (23.4 days) than those receiving only a single amputation. There was a considerable variation in the HC and LOS among ethnic groups by level of amputation. The direct charges reported in this study suggest considerably higher overall direct costs than have been previously reported in the medical literature. The greater burden of disease experienced by African Americans is probably related to their higher amputation cost and longer hospitalization.