14Preterm birth incidence has risen globally and remains a major cause of neonatal mortality despite 15 improved survival. The demand and cost of initial hospitalization has also increased. This study 16 assessed care provider cost in neonatal intensive care units of two hospitals in the state of Kedah, 17 Malaysia. It utilized universal sampling and prospectively followed up preterm infants till discharge. 18 Care provider cost was assessed using mixed method of top down approach and activity based 19 costing. A total of 112 preterm infants were recruited from intensive care (93 infants) and minimal 20 care (19 infants). Majority were from the moderate (23%) and late (36%) preterm groups followed 21 by very preterm (32%) and extreme preterm (9%). Mean total cost per infant increased with level of 22 care and degree of prematurity from MYR 2,751 (MYR 374 -MYR 10,103) for preterm minimal care, 23 MYR 8,478 (MYR 817 -MYR 47,354) for late preterm intensive care to MYR 41,598 (MYR 25,351-24 MYR 58,828) for extreme preterm intensive care. Mean cost per infant per day increased from MYR 25 401 (MYR 363-MYR 534), MYR 444 (MYR 354 -MYR 916) to MYR 532 (MYR 443-MYR 939) 26 respectively. Cost was dominated by overhead (fixed) costs for general (hospital), intermediate 27 (clinical support services) and final (NICU) cost centers where it constituted at least three quarters of 157 MYR 2,518 (MYR 362-MYR 9,406) in minimal care to MYR 31,527 (MYR 12,710-MYR 47,268) in 158 extreme preterm intensive care. Breakdown of overhead cost revealed NICU specific overhead as 159 the overwhelming contributor in all categories (69% -89%). Mean total consumables cost per infant 160 ranged from MYR 232 (MYR 12-MYR 697) in minimal care to MYR 10,071 (MYR 7,428-MYR 13,441) 161 in extreme preterm intensive care.