AIM: To describe the cost of palliative day care (PDC), assessing the value of all resources whether paid for or not. To examine different patterns of resource use resulting from attending PDC. METHODS: Five PDC centres in southern England provided detailed cost and resource use data, both paid and unpaid for. The PDC group were consecutive new referrals to a PDC centre who were well enough to be interviewed. The comparison group were recruited from home care teams. Data were collected at baseline, six to eight weeks and 12-15 weeks, on health and social care utilization in the month prior to interview. Data were divided into cohorts based on time from first interview to death and analysed separately. MAIN OUTCOMES: Annual cost of running a day care centre, and cost per patient per day. Use of all health and social care resources over time, stratified by time from death. Comparison of health and social care by stage of illness, and by PDC attendance. RESULTS: PDC cost around pound 54 per person per day in 1999, rising to pound 75 including unpaid resources. 145 patients had data on health and social care use. The patterns of care showed that, overall, patients accessed few services other than PDC. Comparison group patients did not access similar services elsewhere. PDC might substitute home nursing and GP care for patients who attend PDC at least three months before death but this data is not conclusive. Inpatient care was negligible for both groups. CONCLUSIONS: A full economic evaluation could not be undertaken without robust evidence of the effectiveness of PDC. PDC centres made use of resources that were not paid for and shared resources with inpatient units, reducing costs. Service use was different for patients who attended compared with patients who did not. Similar services were not accessed elsewhere in the community; PDC does not appear to replicate other services for this group of patients.