To assess how payer costs for allogeneic BMT relate to patient characteristics and clinical complications, a retrospective cohort study of 402 persons undergoing allogeneic BMT between 1980 and 1987 at a university-based BMT center was designed to determine total inpatient payer costs, including hospital and physician costs, and number of days hospitalized during the first 180 days following BMT. The average total inpatient payer cost (in 1990 dollars) during the first 180 days following BMT was $208,410. Inflation-adjusted inpatient payer costs increased from $227,806 in 1980 to $308,545 in 1983, and then decreased to $156,163 by 1987. In multivariate analysis, inpatient payer costs were strongly associated with occurrence of CMV infection (increase of $53,517; p = 0.0001) or acute GVHD (increase of $46,500; p = 0.001), and significantly associated with malignant (versus non-malignant) disease (decrease of $36,633; p = 0.05), even after adjusting for length of survival and year of BMT. Inpatient payer costs were not related to patient age, sex or race. Despite recent reductions in inpatient payer costs for BMT, CMV infection and acute GVHD continue to be associated with tremendous costs to third party payers. Further reductions in the costs of BMT may require improved prevention of CMV infection and GVHD.