To determine the cost of post-exposure prevention of hepatitis B among hospital employees, a 12-month prospective study was conducted in six Phoenix-area hospitals. Data on reported employee accidents which involved exposure to blood and any subsequent medical attention were obtained weekly. Costs were assigned to all tests, treatments, and working time lost. For 518 potential hepatitis B exposures, the mean cost per incident was $92. Costs associated specifically with preventing hepatitis accounted for 80% of the costs. When data on these incidents were applied to a model procedure for handling potential exposures to hepatitis B, the costs increased to $109 per incident. One work-related case of clinical hepatitis B cost the hospital $13,376. A determination of total hospital costs for hepatitis B should include the direct and indirect cost of each employee case of the disease, the costs of routine serologic screening of employees, and the cost of post-exposure strategies.