Objective To study the dynamic trend of hospitalization cost of insured inpatients with chronic hepatitis B (CHB) from 2003 to 2007 in Tianjin, to analyze the factors affecting the cost, and to explore the effectiveness of combined application of grey correlation and multiple linear regression in the analysis of the cost. Methods Grey correlation method was adopted to quantify the costs of medicine and other items in order to determine the internal influencing factors and MLR (multiple linear regression analysis) was used to assess the external factors that affected the cost. Results Gray correlation analysis showed that expense of drug was the major influencing factor followed by examination cost which accounted for 67. 49% and 11. 12% of total cost. Days in hospital, severity of the disease and others were external factors affecting the hospitalization cost. Conclusions Drug and examination costs are closely related to the total medical expenditure of insured inpatients with CHB, therefore it is critical to control the unreasonable increase of drug cost and to avoid unnecessary medical examination. The combined use of grey correlation and multiple linear regression is feasible and effective in the analysis of medical cost of hospitalized insured CHB patients.