The authors describe a new model for classifying hospitalized patients with acquired immunodeficiency syndrome (AIDS) according to their severity of illness. In the first phase of the project, a clinical model indicating the relative severity of AIDS complications was formulated, based on the clinical literature and expert opinion. In the second phase, the model was tested empirically using data on in-patient mortality of over 6,000 adult AIDS hospitalizations in New York State during 1985. The ordering of AIDS-related complications in the clinical model was revised to reflect a continuum of increasing likelihood of death in the hospital. The final classification system for AIDS hospitalizations has 20 substages, grouped into three stages, with in-patient, mortality rates increasing from 6% to 60%. The system is automated and can be applied to different AIDS populations to analyze resource use and outcomes of hospital care.