Multicenter trials have shown that monthly infusions of 750 mg/kg of RSV intravenous immune globulin (RSV-IVIG) decreases the risk of hospitalization due to lower respiratory tract infection (LRI) in preterm infants and infants with bronchopulmonary dysplasia (BPD). We estimated the cost of prophylaxis with RSV-IVIG, as well as the cost of hospitalizations prevented. Based on charges at our medical center for 5 dosages of RSV-IVIG (750 mg/kg), plus the cost of a nurse to administer the drug, prophylaxis was estimated to cost between $3860, for an infant weighing 1 kg at the initial infusion, to $8205, for an infant weighing 6 kg. To estimate the risk of LRI hospitalization among infants not given prophylaxis, we used data on 341 consecutive VLBW infants, born 1992-95, who were followed through one year of life at our medical center. 71 LRI hospitalizations occurred in this group. For the 45 hospitalizations that occurred at our medical center, the mean per diem charge, including physician fees, was $1474, and the mean length of stay was 6.4 days. Rates of LRI hospitalization for VLBW infants with no, mild, and moderate to severe BPD, were, respectively, 12%, 17%, and 28%. The reduction in risk of LRI hospitalization provided by RSV-IVIG was estimated using data from a multicenter trial (the PREVENT trial), in which the risk of LRI hospitalization was reduced among RSV-IVIG recipients by 49% and 20%, respectively, in preterm infants with and without BPD. Based on our estimates of the risk of LRI hospitalization, and the reduction in risk afforded by RSV-IVIG, we estimated that for each infant treated, the cost of hospitalizations prevented is $226, $786, and $1294, for infants with no, mild, and moderate to severe BPD, respectively. Thus for VLBW infants the cost of RSV-IVIG ($3860 to $8205) exceeds the cost of hospitalizations prevented, and prophylaxis cannot be justified solely on an economic basis. However, the net cost of prophylaxis is lowest for infants with moderate to severe BPD, and prophylaxis of this group might be justified because of their susceptibility to severe RSV.Drs. O'Shea and Givner have received research support as investigators in clinical trials and honoraria from MedImmune, Inc. Dr. Givner also has received consulting fees from MedImmune, Inc.