Background: The burden of stroke is high and increasing in China. We modelled variations in, and predictors of, the costs of hospital care for patients with acute stroke in China. Methods and Findings: Baseline characteristics and hospital costs for 5,255 patients were collected using the prospective register-based ChinaQUEST study, conducted in 48 Level 3 and 14 Level 2 hospitals in China during 2006-2007. Ordinary least squares estimation was used to determine factors associated with hospital costs. Overall mean cost of hospitalisation was 11,216 Chinese Yuan Renminbi (CNY) (≈US$1,602) per patient, which equates to more than half the average annual wage in China. Variations in cost were largely attributable to stroke severity and length of hospital stay (LOS). Model forecasts showed that reducing LOS from the mean of 20 days for Level 3 and 18 days for Level 2 hospitals to a duration of 1 week, which is common among Western countries, afforded cost reductions of 49% and 19%, respectively. Other lesser determinants varied by hospital level: in Level 3 hospitals, health insurance and the occurrence of in-hospital complications were each associated with 10% and 18% increases in cost, respectively, whilst treatment in a teaching hospital was associated with approximately 39% decrease in cost on average. For Level 2 hospitals, stroke due to intracerebral haemorrhage was associated with a 19% greater cost than for ischaemic stroke. Conclusions: Changes to hospital policies to standardise resource use and reduce the variation in LOS could attenuate costs and improve efficiencies for acute stroke management in China. The success of these strategies will be enhanced by broader policy initiatives currently underway to reform hospital reimbursement systems.