Medicare records represent a potential resource for surveillance data on hospitalizations among the elderly. Several features make these data useful for describing hospitalization patterns: a) Medicare covers hospitalization expenses for approximately 95% of the U.S. population greater than or equal to 65 years, and these data are considered to represent accurately the hospitalization patterns of this group; b) The comprehensive nature of the information about the beneficiary population provides public health researchers with data to generate accurate rates for well-defined demographic and geographic subgroups; c) Because data for all covered hospitalizations have been included in the file since 1984, stable estimates for even relatively rare conditions can be generated for any years since then; d) A unique personal identifier on each record permits the differentiation of first from subsequent hospitalizations, thereby permitting public health researchers to generate both counts and rates of hospitalizations by person and by event; and e) Temporal trends in hospitalization can be generated for 1980 through 1988, because data are available in machine-readable form. This report presents surveillance data for elderly persons hospitalized in 1988 for several diseases of public health importance. In 1988, approximately 9.1 million hospitalizations covered by Medicare occurred among persons greater than or equal to 65 years. For major disease categories, the rates of persons discharged ranged from 7,448/100,000 for circulatory diseases to 274/100,000 for blood diseases. For the 49 discrete diseases and conditions studied, rates varied widely by gender, race, and age. Conditions also varied widely in the mean number of discharges per person and in the probability that the condition would be recorded as the principal diagnosis.