An abnormal serum sodium level is the most common electrolyte disorder in the United States and can have a significant impact on morbidity and mortality. The direct medical costs of abnormal serum sodium levels are not well understood. The impact of hyponatremia and hypernatremia on 6-mo and 1-yr direct medical costs was examined by analyzing data from the Integrated HealthCare Information Services National Managed Care Benchmark Database. During the period analyzed, there were 1274 patients (0.8%) with hyponatremia (serum sodium <135 mmol/L), 162,829 (97.3%) with normal serum sodium levels, and 3196 (1.9%) with hypernatremia (>145 mmol/L). Controlling for age, sex, region, and comorbidities, hyponatremia was a significant independent predictor of costs at 6 mo (41.2% increase in costs; 95% confidence interval, 30.3% to 53.0%) and at 1 yr (45.7% increase; 95% confidence interval, 34.2% to 58.2%). Costs associated with hypernatremia were not significantly different from those incurred by patients with normal serum sodium. In conclusion, hyponatremia is a significant independent predictor of 6-mo and 1-yr direct medical costs.