This study's objective was to determine the incidence and mortality of acute renal failure (ARF) in Medicare beneficiaries. Data were from hospitalized Medicare beneficiaries (5,403,015 discharges) between 1992 and 2001 from the 5% sample of Medicare claims. For 1992 to 2001, the overall incidence rate of ARF was 23.8 cases per 1000 discharges, with rates increasing by approximately 11% per year. Older age, male gender, and black race were strongly associated (P < 0.0001) with ARF. The overall in-hospital death rate was 4.6% in discharges without ARF, 15.2% in discharges with ARF coded as the principal diagnosis, and 32.6% in discharges with ARF as a secondary diagnosis. In-hospital death rates were 32.9% in discharges with ARF that required renal dialysis and 27.5% in those with ARF that did not require dialysis. Death within 90 d after hospital admission was 13.1% in discharges without ARF, 34.5% in discharges with ARF coded as the principal diagnosis, and 48.6% in discharges with ARF as a secondary diagnosis. Discharges with ARF were more (P < 0.0001) likely to have intensive care and other acute organ dysfunction than those without ARF. For discharges both with and without ARF, rates for death within 90 d after hospital admission showed a declining trend. In conclusion, the incidence rate of ARF in Medicare beneficiaries has been increasing. Those of older age, male gender, and black race are more likely to have ARF. These data show ARF to be a major contributor to morbidity and mortality in hospitalized patients.