Rationale: Many decisions to admit patients to the ICU are not grounded in evidence regarding who benefits from such triage, straining ICU capacity and limiting its cost-effectiveness. Objectives: To measure the benefits of ICU admission for patients with sepsis or acute respiratory failure. Methods: At 27 United States hospitals across two health systems from 2013 to 2018, we performed a retrospective cohort study using two-stage instrumental variable quantile regression with a strong instrument (hospital capacity strain) governing ICU versus ward admission among high-acuity patients (i.e., laboratory-based acute physiology score v2 ⩾ 100) with sepsis and/or acute respiratory failure who did not require mechanical ventilation or vasopressors in the emergency department. Measurements and Main Results: Among patients with sepsis (n = 90,150), admission to the ICU was associated with a 1.32-day longer hospital length of stay (95% confidence interval [CI], 1.01-1.63; P < 0.001) (when treating deaths as equivalent to long lengths of stay) and higher in-hospital mortality (odds ratio, 1.48; 95% CI, 1.13-1.88; P = 0.004). Among patients with respiratory failure (n = 45,339), admission to the ICU was associated with a 0.82-day shorter hospital length of stay (95% CI, -1.17 to -0.46; P < 0.001) and reduced in-hospital mortality (odds ratio, 0.75; 95% CI, 0.57-0.96; P = 0.04). In sensitivity analyses of length of stay, excluding, ignoring, or censoring death, results were similar in sepsis but not in respiratory failure. In subgroup analyses, harms of ICU admission for patients with sepsis were concentrated among older patients and those with fewer comorbidities, and the benefits of ICU admission for patients with respiratory failure were concentrated among older patients, highest-acuity patients, and those with more comorbidities. Conclusions: Among high-acuity patients with sepsis who did not require life support in the emergency department, initial admission to the ward, compared with the ICU, was associated with shorter length of stay and improved survival, whereas among patients with acute respiratory failure, triage to the ICU compared with the ward was associated with improved survival.