OBJECTIVE: To assess the effect of newborn circumcision on the incidence and medical costs of urinary tract infection (UTI) during the first year of life for patients in a large health maintenance organization. SETTING: Kaiser Permanente Medical Care Program of Northern California (KPNC). PATIENTS: The population consisted of members of KPNC. The study group consisted of a cohort of 28 812 infants delivered during 1996 at KPNC hospitals; of the 14 893 male infants in the group, 9668 (64.9%) were circumcised. A second cohort of 20 587 infants born in 1997 and monitored for 12 months was analyzed to determine incidence rates. DESIGN: Retrospective study of all infants consecutively delivered at 12 facilities. OUTCOME MEASURES: Diagnosis of UTI was determined from the KPNC computerized database using the International Classification of Diseases, Ninth Revision code for inpatients and KPNC Outpatient Summary Clinical Record codes for outpatients. A sample of 52 patient charts was reviewed to confirm the International Classification of Diseases, Ninth Revision and KPNC Outpatient Summary Clinical Record codes and provide additional data. RESULTS: Infants <1 year old who were born in 1996 had 446 UTIs (292 in females; 154 in males); 132 (86%) of the UTIs in males occurred in uncircumcised boys. The mean total cost of managing UTI was 2 times as high in males ($1111) as in females ($542). This higher total cost reflected the higher rate of hospital admission in uncircumcised males with UTIs (27.3%) compared with females (7.5%); mean age at hospitalization for UTI was 2.5 months old for uncircumcised boys and 6.5 months old for girls. In 1996, total cost of managing UTI in uncircumcised males ($155 628) was 10 times higher than for circumcised males ($15 466) despite the fact that uncircumcised males made up only 35.1% of the male patient base in 1996, reflecting the more frequent occurrence of UTI in uncircumcised males (132 episodes) than in circumcised males (22 episodes), and the larger number of hospital admissions in uncircumcised males (38) than in circumcised males (4). The incidence of UTI in the first year of life was 1:47 (2.15%) in uncircumcised males, 1:455 (.22%) in circumcised males, and 1:49 (2. 05%) in females. The odds ratio of UTI in uncircumcised:circumcised males was 9.1:1. CONCLUSIONS: Newborn circumcision results in a 9. 1-fold decrease in incidence of UTI during the first year of life as well as markedly lower UTI-related medical costs and rate of hospital admissions. Newborn circumcision during the first year of life is, thus, a valuable preventive health measure, particularly in the first 3 months of life, when uncircumcised males are most likely to be hospitalized with severe UTI.