Objective: This paper examines the cost to the Iowa Medicaid program of hospitalizing young children for restorative dental care under general anesthesia, and describes the dental services received in this setting. Methods: Medicaid dental claims for young children receiving restorative dental care under general anesthesia during fiscal year 1994 were matched with corresponding hospital and anesthesia claims. Results: The total cost to the Medicaid program of treating a child in the hospital under general anesthesia was $2,009 per case. Less than 2 percent of Medicaid-enrolled children under 6 years of age who received any dental service accounted for 25 percent of all dollars spent on dental services for this age group, including hospital and anesthesia care. The most frequent type of procedure was stainless steel crowns (SSCs), with an average of almost six per case. Conclusions: Early identification, prevention, and intervention are critically important to prevent the costly treatment of children with ECC in hospital operating rooms.