This study examined the impact of case management on hospital service use, hospital costs, homelessness, substance abuse, and psychosocial problems in frequent users of a public urban emergency department (ED). Subjects were 53 patients who used the ED five times or more in 12 months. Utilization, cost, and psychosocial variables were compared 12 months before and after the intervention. The median number of ED visits decreased from 15 to 9 (P < .01), median ED costs decreased from $4,124 to $2,195 (P < .01) and median medical inpatient costs decreased from $8,330 to $2,786 (P < .01). Homelessness decreased by -57% (P < .01), alcohol use by -22% (P = .05) and drug use by -26% (P = .05). Linkage to primary care increased 74% (P < .01). Fifty-four percent of medically indigent subjects obtained Medicaid (P < .01). There was a net cost savings, with each dollar invested in the program yielding a $1.44 reduction in hospital costs. Thus, case management appears to be a cost-effective means of decreasing acute hospital service use and psychosocial problems among frequent ED users.