A retrospective cost analysis compared hospital costs of standard gentamicin dosing and once‐daily regimens in 1127 patients. Hospital costs compared were drug/supply/preparation/administration (DSPA; $4.56/500 mg once‐daily dose and $3.32/100 mg every 8 hrs standard dose); therapeutic drug monitoring (TDM) ($25/gentamicin level); and nephrotoxicity management. The mean length of therapy was 4.5 days with both regimens. The mean number of blood samples drawn to measure drug levels was 0.65 for once‐daily dosing and 1.7 for standard dosing. Mean DSPA and TDM costs/patient for a 4.5‐day course of once‐daily therapy were $20.52 and $16.25, respectively ($36.77/course of therapy). In comparison, estimated mean DSPA and TDM costs for 4.5 days standard therapy were $44.82 and $42.50, respectively ($87.32/course of therapy). We observed an overall reduction in nephrotoxicity from approximately 4% to 1.2% with the once‐daily program, resulting in a nephrotoxicity management cost reduction from $182 to $55/patient exposed to aminoglycosides. The once‐daily program resulted in a 58% reduction in aminoglycoside‐associated hospital cost and a nephrotoxicity management savings of 70%/patient.