OBJECTIVE: To describe the epidemiology and costs of the acute care of peripheral vascular disease, infection, neuropathy, and ulceration in a U.K. population with special consideration of those patients with diabetes. RESEARCH DESIGN AND METHODS: Routine data describing inpatient care for a 4-year period were analyzed (financial years 1991/1992 to 1994/1995). These data had undergone record-linkage to draw together records from the same patients, and records of patients with diabetes were flagged. Cost estimates were determined by attributing a diagnosis-related group cost-weight to each record. RESULTS: A total of 4,245 admissions (1.2% of all admissions) had a primary diagnosis of peripheral vascular disease, infection, neuropathy, or ulceration, and 7,379 (2.1%) admissions had these categories recorded in any one of six diagnostic fields. These figures were generated by 3,159 and 4,751 patients, respectively. This represented a range of crude annual incidence of admission of between 1.9 and 2.9 per 1,000 people. Patients with diabetes accounted for 625 (15.4%) of primary admissions, a crude annual incidence of admission of 18.8 per 1,000. The age-standardized relative risk of admission for patients with diabetes to the nondiabetic population was 7.61 for men and 6.85 for women. The length of stay for patients with diabetes was almost twice that of the nondiabetic population (15.5 vs. 8.7 days). The relative risk of hospital mortality (diabetes vs. non-diabetes) was 2.83. Surgical procedures were carried out on 857 patients, 272 (31.2%) with diabetes. This represented an age-standardized relative risk of 31.19. The estimated cost of admissions for primary diagnoses in these categories over 4 years was 6,128,211 pounds ($9,743,855). Patients with diabetes accounted for 1,236,623 pounds ($1,966,230), an excess of 87% attributable to the diabetic state. CONCLUSIONS: Diabetes is confirmed as a significant risk factor for peripheral vascular disease, infection, neuropathy, and ulceration. The severity of these disorders in terms of increased risk of hospital mortality, length of stay, and risk of surgical procedure is also demonstrated for those patients with diabetes.