Objectives: The majority of healthcare costs accrued managing cellulitis can be attributed to the small proportion of patients treated with parenteral antibiotics. Hospital in the home (HITH) instead of or following initial inpatient treatment is a safe and effective alternative, but there are few data evaluating its cost-effectiveness for cellulitis. Patients and methods: Our retrospective cohort study included all treatment episodes (by either HITH or an inpatient service for >24 h) with an ICD-10 primary diagnosis code of lower-leg cellulitis at a tertiary-level health service in Melbourne, Australia over 12 months (2012-13). Data included demography, social factors and ICD-10 codes mapped to major comorbidities constituting the Charlson comorbidity index (CCI). Differences in length of stay (LOS) and individual clinical costing (ICC) between HITH- and non-HITH-treated patients were tested with univariable and multivariable (generalized linear model) analyses. Results: For 328 admissions in 294 patients, the average per-day costs were AU$431 for HITH and AU$761 for inpatient care. For 124 patients (38%) treated in HITH, both LOS [mean (95% CI) 7.48 days (6.76-8.20 days) versus 5.82 days (3.45-8.18 days)] and ICC [mean (95% CI) AU$5873 (AU$5212-AU$6534) versus AU$5196 (AU$4567- AU$5824)] were higher than those for patients with solely inpatient care. In multivariable analysis controlling for age, comorbidity, carer support and language, HITH remained associated with significantly longer LOS [1.63-fold (95% CI: 1.24- to 2.13-fold): P < 0.001] and non-significantly with higher cost [1.14-fold (95% CI: 0.97- to 1.34-fold): P = 0.11]. Conclusions: Management of cellulitis represents a substantial cost burden for hospital services. Modest per-day cost savings from HITH can be offset by much longer HITH LOS.