The use of ampicillin-sulbactam before and after the product was formally placed on a hospital formulary is described. In October 1987 the pharmacy and therapeutics committee at an acute-care institution granted ampicillin-sulbactam temporary formulary inclusion on the condition that its use be audited. Formal inclusion was to be based on the results of this preinclusion audit. A second audit was to be performed if formal inclusion was granted. The data were collated after each audit, and for each patient an infectious-disease consultant proposed an alternative antimicrobial regimen representing what would probably have been prescribed had ampicillin-sulbactam not been available. Sixty-four patients received the product during the six-month preinclusion audit period. Ampicillin-sulbactam was given to 37% of the patients for indications listed in FDA-approved labeling. The dosage was considered appropriate in 88% of the patients. Clinical outcome was considered successful in 84% of the patients who received the product for known infections. Therapy with ampicillin-sulbactam was less expensive (by $4125) in 35 patients and more costly (by $1523) in 29 patients; the projected annual savings were $7805. After formal inclusion on the formulary, ampicillin-sulbactam was prescribed for some 700 patients over a 16-month period. A review in 49 patients showed appropriate indication and dosage for 63% and 84% of the patients, respectively, and an 84% rate of therapeutic success. The extrapolated cost savings were $26,429 per year. After formulary inclusion, the use of ampicillin-sulbactam increased, as did the frequency of its use for indications appearing in FDA-approved labeling.