BACKGROUND: The study examined the effect of individual characteristics on longitudinal patterns of health care utilization and cost among individuals entering chemical dependency (CD) treatment. METHOD: Structured interviews and computerized administrative databases were linked to obtain severity, utilization and cost data. Total medical costs and their components were examined for the 6 months prior to intake through 5 years post-intake. Statistical analyses were conducted using the hierarchical linear modeling framework. RESULTS: Age was positively correlated with total medical costs. Women had higher inpatient utilization and higher inpatient, primary care and total cost at baseline (p<.05). However, they had steeper decline in primary care costs. While age was not related to inpatient and ER use at baseline (after controlling for psychiatric and medical severity), older individuals had smaller declines in hospital days and inpatient cost over time. Individuals with high medical and psychiatric severity had higher utilization and costs (p<.01). Those who were abstinent had higher costs. CONCLUSIONS: There are important differences in patient characteristics and treatment outcomes that influence utilization and cost trajectories. The relationship between medical severity at intake and primary care cost pre-intake among patients with drug and alcohol problems suggests an opportunity to identify and treat drug and alcohol problems in primary care settings. It also suggests that medical evaluations and treatment should not be overlooked during CD treatment. The positive association between abstinence and trajectories of primary care and total medical costs suggests that maintaining abstinence over a long term requires some kind of continuing care either in primary care settings or via additional contacts with specialty CD departments.