BACKGROUND: Paediatric fever is a common cause of emergency department (ED) attendance. A lack of prompt and definitive diagnostics makes it difficult to distinguish viral from potentially life-threatening bacterial causes, necessitating a cautious approach. This may result in extended periods of observation, additional radiography, and the precautionary use of antibiotics (ABs) prior to evidence of bacterial foci. This study examines resource use, service costs, and health outcomes. METHODS: We studied an all-year prospective, comprehensive, and representative cohort of 6518 febrile children (aged < 16 years), attending Alder Hey Children's Hospital, an NHS-affiliated paediatric care provider in the North West of England, over a 1-year period. Performing a time-driven and activity-based micro-costing, we estimated the economic impact of managing paediatric febrile illness, with focus on nurse/clinician time, investigations, radiography, and inpatient stay. Using bootstrapped generalised linear modelling (GLM, gamma, log), we identified the patient and healthcare provider characteristics associated with increased resource use, applying retrospective case-note identification to determine rates of potentially avoidable AB prescribing. RESULTS: Infants aged less than 3 months incurred significantly higher resource use than any other age group, at £1000.28 [95% CI £82.39-£2993.37] per child, (p < 0.001), while lesser experienced doctors exhibited 3.2-fold [95% CI 2.0-5.1-fold] higher resource use than consultants (p < 0.001). Approximately 32.4% of febrile children received antibiotics, and 7.1% were diagnosed with bacterial infections. Children with viral illnesses for whom antibiotic prescription was potentially avoidable incurred 9.9-fold [95% CI 6.5-13.2-fold] cost increases compared to those not receiving antibiotics, equal to an additional £1352.10 per child, predominantly resulting from a 53.9-h increase in observation and inpatient stay (57.1 vs. 3.2 h). Bootstrapped GLM suggested that infants aged below 3 months and those prompting a respiratory rate 'red flag', treatment by lesser experienced doctors, and Manchester Triage System (MTS) yellow or higher were statistically significant predictors of higher resource use in 100% of bootstrap simulations. CONCLUSION: The economic impact of diagnostic uncertainty when managing paediatric febrile illness is significant, and the precautionary use of antibiotics is strongly associated with increased costs. The use of ED resources is highest among infants (aged less than 3 months) and those infants managed by lesser experienced doctors, independent of clinical severity. Diagnostic advances which could increase confidence to withhold antibiotics may yield considerable efficiency gains in these groups, where the perceived risks of failing to identify potentially life-threatening bacterial infections are greatest.