BACKGROUND: Growing acceptance rates of elderly patients for dialysis requires a careful planning of renal services expansion. As little is known about the actual resource use in patients 70 years and over, we evaluated the entire range of costs related to treatment, hospitalization, medication and other health and social service use, and assessed the impact of socio-demographic and clinical factors on costs. METHODS: Service use and costs were assessed in a 12-month prospective cohort study of 171 dialysis patients, 70 years of age and over, from four hospital-based renal units in London, UK. RESULTS: Total costs ranged between 14,940 pounds and 58,250 pounds per annum. The average annual cost was 22,740 pounds [95% confidence interval (CI), 21,470-24,020 pounds]. The majority of costs were allocated to dialysis treatment and transport (70%), hospitalizations (12%) and medication (12%). Other health and social services accounted for only 6% of total costs. Dialysis and hospitalization costs were pound 68.4 per day on average. Univariate subgroup analyses showed no significant difference between patients on peritoneal dialysis (64.5 pounds) and haemodialysis (71.5 pounds, P = 0.13). Age 80 years and over and presence of peripheral vascular disease (PVD) were associated with higher daily costs of 73.3 pounds compared with 63.2 pounds in the 70-74 age group (P = 0.033) and 76.9 pounds vs 63.8 pounds in patients without PVD (P = 0.022), respectively. Proximity to death was associated with a nearly pound 40 increase in daily costs (96.8 vs 59.7 pounds; P < 0.001). Multiple linear regression analyses confirmed these findings and showed that age 80 years and over and presence of peripheral and cerebrovascular disease were significant predictors of costs. There was a large but marginally significant difference in costs in patients with cancer. We found no evidence that diabetes was associated with higher dialysis and hospitalization costs. CONCLUSIONS: The costs of providing dialysis for patients 70 years and over are largely shaped by the treatment costs rather than by use of community health and social services. Though age above 80 and co-morbidity are associated with increased resource use, average treatment costs are not higher than estimates for dialysis patients in general. This suggests that there is no case for providing treatment to younger patients and denying it to elderly patients on grounds of cost.