Background: Invasive meningococcal disease (IMD) remains a serious public health concern due to a sustained high case fatality rate and morbidity in survivors. This study aimed to estimate the hospital service costs associated with IMD and variables associated with the highest costs in Australian children admitted to a tertiary paediatric hospital. Methods: Clinical details were obtained from medical records and associated inpatient costs were collected and inflated to 2011 Australian dollars using the medical and hospital services component of the Australian Consumer Price Index. Both unadjusted and adjusted analyses were undertaken. Multivariate regression models were used to adjust for potential covariates and determine independent predictors of high costs and increased length of hospital stay. Results: Of 109 children hospitalised with IMD between May 2000 and April 2011, the majority were caused by serogroup B (70.6%). Presence of sequelae, serogroup B infection, male gender, infants less than one year of age, and previous medical diagnosis were associated with higher inpatient costs and length of stay (LOS) in hospital (p< 0.001) during the acute admissions. Children diagnosed with septicaemia had a longer predicted LOS (p= 0.033) during the acute admissions compared to those diagnosed with meningitis alone or meningitis with septicaemia. Serogroup B cases incurred a significantly higher risk of IMD related readmissions (IRR: 21.1, p= 0.008) for patients with sequelae. Serogroup B infection, male gender, diagnosis of septicaemia, infants less than one year of age, and no previous medical diagnosis were more likely to have higher inpatient costs and LOS during the IMD related readmissions for patients with sequelae (p< 0.05). Conclusion: Although IMD is uncommon, the disease severity and associated long-term sequelae result in high health care costs, which should be considered in meningococcal B vaccine funding considerations.