BACKGROUND: Sepsis is common, highly morbid, and costly, yet little is known about differences in the care or outcomes of patients with sepsis across hospitals. We sought to characterize variations in hospital spending and mortality rates and to determine whether higher levels of spending are associated with better hospital survival. METHODS: We conducted a cross-sectional study of hospitals that treated at least 100 adult patients with sepsis between 2004 and 2006. We developed multivariable models for expected patient mortality and costs and calculated standardized mortality and cost ratios for each hospital. We defined clinically significant variation as observed outcomes that differed from expected outcomes by at least 10%. We examined the association between hospital-level spending and mortality rate using a model that adjusted for hospital characteristics. RESULTS: Among 166,931 patients with sepsis at 309 hospitals, we observed wide variations in hospital-level mortality and cost. Of 61 hospitals (19%) at the median expected mortality, observed mortality ranged from 9% to 32%. More than a third (34%) of hospitals exceeded expected costs by at least 10%, with a median average excess cost of $5207. We found lower-than-expected costs and mortality rates at 22 hospitals (7%). An adjusted model did not show a significant association between hospital spending and mortality. CONCLUSIONS: Hospital spending and adjusted mortality rates for patients with sepsis vary substantially, but higher hospital expenditures are not associated with better survival. Efforts to enhance the value of sepsis care could be modeled on hospitals that achieve lower-than-expected mortality and costs.