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BACKGROUND Carvedilol reduces disease progression in heart failure, but to our knowledge, its effects on hospitalizations and costs have not been evaluated. OBJECTIVES We examined the effects on hospitalization frequency and costs in the U.S. Carvedilol Heart Failure Trials Program. This program consisted of four concurrent, multicenter, double-blind, placebo-controlled studies involving 1,094 patients with New York Heart Association class II to IV heart failure, which treated patients with placebo or carvedilol for up to 15 months (median, 6.5 months). METHODS Detailed resource utilization data were collected for all hospitalizations occurring between randomization and the end of follow-up. In-patient care costs were estimated based on observed levels of resource use. RESULTS Compared with placebo, carvedilol reduced the risk of hospitalization for any reason by 29% (p = 0.009), cardiovascular hospitalizations by 28% (p = 0.034) and heart failure hospitalizations by 38% (p = 0.041). Carvedilol also decreased the mean number of hospitalizations per patient (for cardiovascular reasons 30% [p = 0.02], for heart failure 53% [p = 0.03]). Among hospitalized patients, carvedilol reduced severity of illness during hospital admission, as reflected by shorter length of stay and less frequent use of intensive care. For heart failure hospital admissions, carvedilol decreased mean length of stay by 37% (p = 0.03) and mean number of intensive care unit/coronary care unit days by 83% (p = 0.001), with similar effects on cardiovascular admissions. As a result, estimated inpatient care costs with carvedilol were 57% lower for cardiovascular admissions (p = 0.016) and 81% lower for heart failure admissions (p = 0.022). CONCLUSIONS Carvedilol added to angiotensin-converting enzyme inhibition reduces hospitalization risk as well as severity of illness and resource utilization during admission in patients with chronic heart failure.