Objective: To compare hospital costs of Aboriginal and non-Aboriginal patients having haemodialysis treatment and forecast the future treatment cost. Methods: The costs of patients with HD in the "Top End" of Australia's Northern Territory were estimated for the financial years 1996/97 and 1997/98 using a hospital costing model. We used an Autoregression Integrated Moving Average model to predict future demand. Results: 165 patients (101 Aboriginal and 64 non-Aboriginal) were treated at a total cost of $12.4 million in this two-year period. These 165 patients represented 0.7% of inpatients, 8.8% of total inpatient costs and 31.6% of total inpatient episodes of care in the Top End region. $9.5 million (77%) was spent on routine haemodialysis treatment and $2.9m (23%) on other hospitalisations. The average cost per routine haemodialysis treatment over the two-year period was $527, or $78 600 per patient treatment year. Hospitalisations for comorbidities occurred in 86% of Aboriginal and 39% of non-Aboriginal patients. Average cost per patient, number of admissions and length of hospital stays were all significantly greater for Aboriginals. We predict an average increase in the number of treatments of 12% each year over the next five years and a five-year cost of $49.8m. Conclusions: A multipronged strategy designed to reduce the prevalence and costs of renal failure is required.