OBJECTIVE: To determine trends in use of Australian acute hospital inpatient services by older patients. DESIGN AND DATA SOURCES: Secondary analysis of hospital data from the Australian Institute of Health and Welfare in the period 1993-94 to 2001-02, with population data for this period from the Australian Bureau of Statistics. OUTCOME MEASURES: Population-based rates of hospital separations and bed utilisation. RESULTS: The Australian aged population (65 years and older) increased by 18% compared with total population growth of 10%, yet the proportion of hospital beds occupied by older patients remained stable at 47%. The most substantial changes were observed in the population aged 75 years and older, with separations increasing by 89%, length of stay reducing by 35% and bed utilisation increasing by 23%. However, rates of bed utilisation (in relation to population) declined among older groups (10% decline in per capita use in population 75 years and older), but increased in the younger population (1% increase in per capita use in people younger than 65 years). CONCLUSION: Important trends in use of inpatient services were identified in this study. These trends are contrary to common perception. Ageing of the Australian population was not associated with an increase in the proportion of hospital beds used by older patients.