Abstract Background: Overseas studies suggest that delirium is a common and serious health problem of hospitalized elderly. There is very little information in New Zealand. Aims: To study prospectively the frequency and effect of delirium on a cohort of elderly general medical patients. Methods: Over 2 months, 317 patients were admitted to general medical wards; 70% were aged 65 years and above. These patients were screened for delirium. Comparisons were made between the delirious and non-delirious patients. Results: Fifty-six of the 216 patients screened had delirium. The prevalence and incidence of delirium were 23.4 and 5.7%, respectively. Thirty-one per cent of delirious patients had a previous history of dementia; 48% of delirious patients had multiple precipitants, most commonly infections. Delirium was associated with higher complication rates – 94 versus 39% in the non-delirious patients – and a doubling in the length of hospital stay. Over 50% of delirious patients required increased supports on discharge with a general trend towards higher frequency of institutionalization. The presence of delirium was associated with increased use of neuroleptic medications, special nursing care, cot sides and restraints. A non-significant trend towards increased mortality was seen in the delirious group. Conclusions: Delirium is a common health problem in elderly patients, associated with multiple adverse outcomes. This study highlighted the prognostic importance of diagnosing delirium. Recommendations included improved health professional education, development of guidelines including rational use of neuroleptic medication and measures to improve follow up for these patients.