purpose: Controlling inappropriate antibiotic usage is a major focus for hospital quality assurance and cost-containment programs. We assessed the impact of strengthening a parenteral antibiotic control policy and instituting continuous infectious disease service (IDS) reviews of the appropriateness of antimicrobial therapy on cost and patient outcomes. patients and methods: All patients receiving intravenous antibiotics during a 3.5-year period from 1986 to 1989 were included in either the pre- or post-policy study group. Antibiotic costs 16 months before were compared with antibiotic costs 26 months after implementation of a new policy to restrict inappropriate usage of (1) broad-spectrum antibiotics when not necessary, (2) expensive agents when a less costly agent could be used, and (3) an excessive dosage or interval. Patient subgroups treated 4 months before and 4 months after policy implementation were compared further within diagnosis-related group (DRG) assignments using patient demographic, cost, and outcome measures. results: The average monthly antibiotic costs during the 26-month post-policy period were $7,600 less than during the 16-month pre-policy period (p <0.0001), resulting in an average yearly drug cost reduction of $91,200. The IDS team altered therapy in 611 (34.5%) of 1,769 reviews of antibiotic usage during the 26-month period. The comparisons among similar patient groups by DRG classification revealed the average number of antibiotic doses per study patient admission was decreased 24% (p = 0.005) and drug costs were reduced 32% (p = 0.004) after policy implementation. In two DRG categories (i.e., respiratory infections plus pneumonia), patients in the post-policy group had a 33% decrease in average number of doses (p = 0.05) and 45% decrease in antibiotic costs (p = 0.04) compared with the pre-policy group. Similar trends were observed in most DRG categories. There was an average $70 per admission decrease in drug cost and a reduction of eight antibiotic doses per admission after policy initiation. The overall prevalence of deaths (p = 0.22) and average length of antibiotic therapy (p = 0.29) were less in the post-policy period despite group similarities in patient characteristics and lengths of hospital stay. conclusion: Antibiotic control policies can be developed to ensure quality care and can be designed to select for cost-effective agents. Prospective and continuous monitoring of antibiotic usage by the IDS resulted in a significant and sustained reduction in antibiotic costs without detrimental effect on the length of therapy or deaths.