OBJECTIVE To examine the clinical characteristics and health service use of children with high Medicaid expenditures. METHODS We examined 1992 Medicaid claims and eligibility files from four states (California, Georgia, Michigan, Tennessee) for children with at least $10000 billed to Medicaid who obtained Medicaid through the Supplemental Security Income (SSI) Program and a comparison group (matched by age group and gender) of children receiving Medicaid for other reasons. We compared mean expenditures, examined expenses by category, and examined diagnoses associated with at least $10000 in expenses. RESULTS In 1992, Medicaid paid on average approximately $1000 for children with non-SSI Medicaid enrollment. Expenditures for children with SSI were 2.9 to 9.4 times higher, but once the approximately 10% of children with high expenditures were excluded, SSI average expenditures were only 1.5 to 2.7 times higher than the non-SSI average. Children with high expenditures are likely to use hospitals and long-term care, and these services account for more than half of the average expenditures. Children with high expenditures and SSI are more likely to have chronic medical conditions than are their peers enrolled in Medicaid but not through SSI. CONCLUSIONS A small proportion of children, even on SSI, account for very large proportions of Medicaid expenditures. Most children with SSI, despite having relatively severe mental health, physical, or developmental disabilities, have relatively modest Medicaid expenditures.