Exacerbations of chronic obstructive pulmonary disease (COPD) have serious health consequences for patients and are strongly associated with unscheduled healthcare resource use. This study used a preference-based quality of life measure questionnaire (EQ-5D) to evaluate the impact of exacerbation on health status and utility during a patient's admission to hospital and short-term follow-up. Costs of admission were calculated. In total, 149 patients consented to take part in the study representing 222 admissions to hospital. At admission patients reported high levels of problems for all dimensions of the EQ-5D. Mean utility (-0.077) and Visual Analogue Scale (25.9) values indicated great impairment, with 61% of patients having a negative utility value representing a health state equivalent to 'worse than death' at admission. Many problems were still reported at discharge. By 3 months follow-up patients had deteriorated, with percentages of patients reporting problems in mobility (98%) and usual activity (88%) almost back up to admission levels. Health status and utility values were similar regardless of lung function at admission and at discharge. Approximately half of the patients in each category had a negative utility value at admission representing a health state 'worse than death', with similar levels of improvement by discharge. The mean cost of an admission was 2130.34 pounds (SD 1326.09) with only a mean of 110.37 pounds(5%) because of medication. No differences were noted by lung function category. In conclusion, all COPD patients requiring admission for an exacerbation suffer a serious deterioration in health status which, although improves during admission, notably deteriorates by 3 months postdischarge.