Using data from the 2002 Nationwide Inpatient Sample of the Healthcare Cost and Utilization Project, we examined the magnitude, variation, and determinants of rural hospital resource utilization associated with hospitalizations due to ambulatory care sensitive conditions (ACSCs). An estimated $9.5 billion in charges incurred in rural hospitals nationwide in 2002 was found to be associated with hospitalizations due to ACSCs. Our findings suggest that the smaller a rural hospital, the greater the portion of its financial resources used to treat patients with ACSC. Regional variation in ACSC-related hospital charges is generally consistent with the geographic variation in the population's economic status and primary care physician supply-residents of the South region have the poorest access to primary healthcare. In summary, smaller rural communities spend more of their healthcare resources on avoidable hospital inpatient care than do larger rural communities, leaving smaller rural communities potentially fewer resources to spend on preventive and primary healthcare. Health intervention programs and health policies should be designed to increase access to and utilization of appropriate preventive and primary healthcare in rural areas, especially in small and remote communities.