This study mainly aims to identify the direct cost and economic burden of hypoglycemia for patients with type II diabetes mellitus in Malaysia. A cross-sectional study explored the cost incurred for hypoglycemia among patients admitted to University Kebangsaan Malaysia Medical Centre (UKMMC). The study covered patients aged 20-79 years hospitalized with a primary diagnosis of ICD-10 hypoglycemia and discharged between January 2010 and September 2015 according to the casemix database. A costing analysis was done through a step-down approach from the perspective of health providers. Cost data were collected for three levels of cost centers with the help of a hospital-costing template. The costing data from UKMMC were used to estimate the national burden of hypoglycemia among type II diabetics for the whole country. Of 244 diabetes patients admitted primarily for hypoglycemia to UKMMC, 52% were female and 88% were over 50 years old. The cost increased with severity. Managing a hypoglycemic case requires five days (median) of inpatient stay on average, with a range of 2-26 days, and costs RM 8,949 (USD 2,289). Of the total cost, 30% related to ward (final cost center), 16% to ICU, and 15% to pharmacy (secondary-level cost center) services. Considering that 3.2% of all admissions were hypoglycemia related, the total annual cost of hypoglycemia care for adult diabetics in Malaysia is estimated at RM 117.4 (USD 30.0) million, which translates to 0.5% of the Ministry of Health budget. Hypoglycemia imposes a substantial economic impact even without the direct and indirect cost incurred by patients and other cost of complications. Diabetic management needs to include proper diabetic care and health education to reduce episodes of hypoglycemia.