Despite extensive research into the etiology and treatment of severe sepsis, little is known about its epidemiology in children. We sought to determine the age- and sex-adjusted incidence, outcome, and associated hospital costs of severe sepsis in United States children using 1995 hospital discharge and population data from seven states (24% of the United States population). Of 1,586,253 hospitalizations in children who were 19 years old or less, 9,675 met International Classification of Diseases, 9th revision, clinical modification-based severe sepsis criteria or 42,364 cases of pediatric severe sepsis per year nationally (0.56 cases per 1,000 population per year). The incidence was the highest in infants (5.16 per 1,000), fell dramatically in older children (0.20 per 1,000 in 10 to 14 year olds), and was 15% higher in boys than in girls (0.60 versus 0.52 per 1,000, p < 0.001). Hospital mortality was 10.3%, or 4,383 deaths nationally (6.2 per 100,000 population). Half of the cases had underlying disease (49.0%), and over one-fifth (22.9%) were low-birth-weight newborns. Respiratory infections (37%) and primary bacteremia (25%) were the most common infections. The mean length of stay and cost were 31 days and $40,600, respectively. Estimated annual total costs were 1.97 billion US dollars nationally. Severe sepsis is a significant health problem in children and is associated with the use of extensive healthcare resources. Infants are at highest risk, especially those with a low birth weight.