Background Delirium is a major cause of preventable mortality and morbidity in hospitalized adults, but accurately determining rates of delirium remains a challenge. Objective To characterize and compare medical inpatients identified as having delirium using two common methods, administrative data and retrospective chart review. Methods We conducted a retrospective study of 3881 randomly selected internal medicine hospital admissions from six acute care hospitals in Toronto and Mississauga, Ontario, Canada. Delirium status was determined using ICD-10-CA codes from hospital administrative data and through a previously validated chart review method. Baseline sociodemographic and clinical characteristics, processes of care and outcomes were compared across those without delirium in hospital and those with delirium as determined by administrative data and chart review. Results Delirium was identified in 6.3% of admissions by ICD-10-CA codes compared to 25.7% by chart review. Using chart review as the reference standard, ICD-10-CA codes for delirium had sensitivity 24.1% (95%CI: 21.5–26.8%), specificity 99.8% (95%CI: 99.5–99.9%), positive predictive value 97.6% (95%CI: 94.6–98.9%), and negative predictive value 79.2% (95%CI: 78.6–79.7%). Age over 80, male gender, and Charlson comorbidity index greater than 2 were associated with misclassification of delirium. Inpatient mortality and median costs of care were greater in patients determined to have delirium by ICD-10-CA codes (5.8% greater mortality, 95% CI: 2.0–9.5 and $6824 greater cost, 95%CI: 4713–9264) and by chart review (11.9% greater mortality, 95%CI: 9.5–14.2% and $4967 greater cost, 95%CI: 4415–5701), compared to patients without delirium. Conclusions Administrative data are specific but highly insensitive, missing most cases of delirium in hospital. Mortality and costs of care were greater for both the delirium cases that were detected and missed by administrative data. Better methods of routinely measuring delirium in hospital are needed.