OBJECTIVE To determine rates of hospitalization associated with respiratory syncytial virus (RSV) infection among children with and without specific medical conditions. METHODS Retrospective cohort study of all children <3 years old enrolled in the Tennessee Medicaid program from July 1989 through June 1993 (248,652 child-years). RESULTS During the first year of life, the estimated number of RSV hospitalizations per 1000 children was 388 for those with bronchopulmonary dysplasia, 92 for those with congenital heart disease, 70 for children born at < or = 28 weeks' gestation, 66 for those born at 29 to <33 weeks, 57 for those born at 33 to <36 weeks, and 30 for children born at term with no underlying medical condition. In the second year of life, children with bronchopulmonary dysplasia had an estimated 73 RSV hospitalizations per 1000 children, whereas those with congenital heart disease had 18 and those with prematurity 16 per 1000. Overall, 53% of RSV hospitalizations occurred in healthy children born at term. CONCLUSIONS Children with bronchopulmonary dysplasia have high rates of RSV hospitalization until 24 months of age. In contrast, after the first year of life, children with congenital heart disease or prematurity have rates no higher than that of children at low risk who are <12 months old.