OBJECTIVES: To describe the magnitude of off-label drug use, to identify drugs most commonly used off-label, and to identify factors associated with off-label drug use in children hospitalized in the United States. DESIGN: Retrospective cohort study. SETTING: Administrative database containing inpatient resource utilization data from January 1 to December 31, 2004, from 31 tertiary care pediatric hospitals in the United States. PARTICIPANTS: Hospitalized patients 18 years or younger. MAIN EXPOSURES: Institution and patient characteristics. MAIN OUTCOME MEASURES: Off-label drug use was defined as use of a specific drug in a patient younger than the Food and Drug Administration-approved age range for any indication of that drug. RESULTS: At least 1 drug was used off-label in 297 592 (78.7%) of 355 409 patients discharged during the study. Off-label use accounted for $270 275 849 (40.5%) of the total dollars spent on these medications. Medications classified as central or autonomic nervous system agents or as fluids or nutrients, or gastrointestinal tract agents were most commonly used off-label, whereas antineoplastic agents were rarely used off-label. Factors associated with off-label use in multivariate analysis were as follows: undergoing a surgical procedure, age older than 28 days, greater severity of illness, and all-cause in-hospital mortality. CONCLUSIONS: Most patients hospitalized at tertiary care pediatric institutions receive at least 1 medication outside the terms of the Food and Drug Administration product license. Substantial variation in the frequency of off-label use was observed across diagnostic categories and drug classes. Despite the frequent off-label use of drugs, using an administrative database, we cannot determine which of these treatments are unsafe or ineffective and which treatments result in substantial benefit to the patient.