With 71% of Malawians living on < $1.90 a day, high household costs associated with severe malaria are likely a major economic burden for low income families and may constitute an important barrier to care seeking. Nevertheless, few efforts have been made to examine these costs. This paper describes household costs associated with seeking and receiving inpatient care for malaria in health facilities in Malawi. A cross-sectional survey was conducted in a representative nationwide sample of 36 health facilities providing inpatient treatment for malaria from June-August, 2012. Patients admitted at least 12 h before study team visits who had been prescribed an antimalarial after admission were eligible to provide cost information for their malaria episode, including care seeking at previous health facilities. An ingredients-based approach was used to estimate direct costs. Indirect costs were estimated using a human capital approach. Key drivers of total household costs for illness episodes resulting in malaria admission were assessed by fitting a generalized linear model, accounting for clustering at the health facility level. Out of 100 patients who met the eligibility criteria, 80 (80%) provided cost information for their entire illness episode to date and were included: 39% of patients were under 5 years old and 75% had sought care for the malaria episode at other facilities prior to coming to the current facility. Total household costs averaged $17.48 per patient; direct and indirect household costs averaged $7.59 and $9.90, respectively. Facility management type, household distance from the health facility, patient age, high household wealth, and duration of hospital stay were all significant drivers of overall costs. Although malaria treatment is supposed to be free in public health facilities, households in Malawi still incur high direct and indirect costs for malaria illness episodes that result in hospital admission. Finding ways to minimize the economic burden of inpatient malaria care is crucial to protect households from potentially catastrophic health expenditures.