The objective of this study was to examine the effect of surfactant replacement therapy on hospital resource uti-lization in a well defined cohort of preterm infants with respiratory distress syndrome (RDS). Thirty preterm infants 800g with RDS requiring mechanical ventila-tion with Fi02 of 0.4 given modified bovine surfactant (Survanta) were compared with an equal number of his-torical controls. The total cost of neonatal care was cal-culated in a detailed survey covering all aspects of resource use. Surfactant-treated infants had an improved survival rate (90.0% vs 66.7%, p=0.03) and a trend towards shorter ventilator days (11.8 vs 19.0 days, p=0.17). There were no significant differences in the number of laboratory and radiological investiga-tions, use of disposable items, equipment, medications and other therapies. The total hospital cost per livebirth for surfactant-treated and control infants were R/V120,281 and R1V121,785 respectively. Personnel salaries represented the largest sector of resource uti-lization. When analysed by birthweight categories, the cost per livebirth for surfactant-treated and control infants in the 800-999g category were RM37,315 and RM14,760 respectively. As for the surfactant-treated and control infants in the 1000-1499g category, the cost per livebirth were RM21,426 and RM32,327 respectively. We concluded that surfactant replacement therapy did not increase overall hospital resource uti-lization and may decrease the cost for infants weighing 1000g.