Background Evidence on the economic impact on individuals and their families following an injury in Vietnam is limited. This study examines the costs and the risk of impoverishment due to hospitalised injuries at 12 months following hospital discharge and associated factors. Method Employing a prospective cohort design, 892 people hospitalised for injury were recruited from Thái Bình General Hospital in Vietnam in 2010 and followed up for 12 months. All out-of-pocket costs incurred and income lost by injured persons and their caregivers associated with care and treatment of their injuries were reported. To examine associated factors, we used generalised estimating equation models for costs and modified Poisson regression for the risk of impoverishment. Results The mean total costs by 12 months postdischarge were US$804, nearly 1.2 times the annual average income. Injuries that incurred highest costs were falls (US$950) and road traffic injuries (RTIs) (US$794). At 12-month follow-up, 181 persons (26.9%) became impoverished, with those injured in RTIs and falls at highest risk (26.1% and 35.4%, respectively). Factors associated with higher costs were also those associated with higher risk of impoverishment. These include those injured in RTIs or falls; having higher severity level; principal injured region as upper extremities, lower extremities or head; physical nature of injuries as fracture or concussion injuries; and longer hospitalisation. Conclusions Injuries impose significant economic burden on injured persons and their families during and beyond hospitalisation. In addition to prevention, there is a need to reform health financing system to protect injured persons from significant out-of-pocket expense for healthcare services.