The aims of this study were to examine the frequency of, and the reasons for, emergency hospitalization for asthma among children. In addition, the costs of hospital treatment, preventive medication, and productivity losses of the caregivers were evaluated in a population-based setting during 1 year. Data on purchases of regular asthma medication were obtained from the Social Insurance Institution. In total, 106 (2.3/1000) children aged up to 15 years were admitted 136 times for asthma exacerbation to the Kuopio University Hospital in 1998. This represented approximately 5% of all children with asthma in the area. The trigger for the exacerbation was respiratory infection in 63% of the episodes, allergen exposure in 24%, and unknown in 13%. The age-adjusted risk for admittance was 5.3% in children on inhaled steroids, 5.8% in those on cromones, and 7.9% in those with no regular medication for asthma. The mean direct cost for an admission was $1,209 (median $908; range $454-6,812) and the indirect cost was $358 ($316; $253-1,139). The cost of regular medication for asthma was, on average, $272 per admitted child on maintenance. The annual total cost as a result of asthma rose eight-fold if a child on regular medication was admitted for asthma.