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Increased utilization of suboptimal organs in response to organ shortage has resulted in increased incidence of delayed graft function (DGF) after transplantation. Although presumed increased costs associated with DGF are a deterrent to the utilization of these organs, the financial burden of DGF has not been established. We used the Premier Healthcare Database to conduct a retrospective analysis of healthcare resource utilization and costs in kidney transplant patients (n = 12 097) between 1/1/2014 and 12/31/2018. We compared cost and hospital resource utilization for transplants in high-volume (n = 8715) vs low-volume hospitals (n = 3382), DGF (n = 3087) vs non-DGF (n = 9010), and recipients receiving 1 dialysis (n = 1485) vs multiple dialysis (n = 1602). High-volume hospitals costs were lower than low-volume hospitals ($103 946 vs $123 571, P < .0001). DGF was associated with approximately $18 000 (10%) increase in mean costs ($130 492 vs $112 598, P < .0001), 6 additional days of hospitalization (14.7 vs 8.7, P < .0001), and 2 additional ICU days (4.3 vs 2.1, P < .0001). Multiple dialysis sessions were associated with an additional $10 000 compared to those with only 1. In conclusion, DGF is associated with increased costs and length of stay for index kidney transplant hospitalizations and payment schemes taking this into account may reduce clinicians' reluctance to utilize less-than-ideal kidneys., (© 2020 John Wiley & Sons A/S. Published by John Wiley & Sons Ltd.)