Background: Advances in technology and infrastructure have facilitated transfer of complex services from acute care hospitals to the home. This increases the burden on community resources but may provide net savings to the health care system. We undertook a retrospective cohort study of patients transferred from hospital to home while receiving home parenteral nutrition (PN) to assess their costs of care. Methods: A detailed review of medical records was undertaken for all patients managed by the Hamilton Health Sciences Home PN Program between 1996 and 2001 whose PN was initiated in hospital. Mean per diem direct medical costs were estimated from the perspective of the provincial Ministry of Health for 3 periods: the last 2 weeks before discharge and the first month after discharge. Costs were compared among time intervals and among patients subgroups defined by age and underlying disease. Results: Twenty‐nine eligible subjects were identified. Common indications for PN included malignancy (n = 12), inflammatory bowel disease (n = 6), and intestinal ischemia (n = 4). Mean per diem costs in the last week of hospitalization were higher than those in the first month after discharge ($567 vs $405, p < .0001). Acute care resources accounted for <10% of the overall costs on home PN. The estimated monthly savings per patient maintained on home PN were $4860 (95% confidence interval $2700–$7000). Savings were even greater among patients with underlying malignancy and advanced age. Conclusions: Home PN is cost saving when compared with hospital‐based PN. Neither age nor underlying malignancy should pose a barrier to receipt of home PN.