Antimicrobial prescribing patterns for Tennessee Medicaid children having their first case of otitis media (OM) in at least nine months were studied. Tennessee Medicaid claims data for patients under 11 years whose first documented OM diagnosis in 1993 occurred in the fourth quarter and who had had an antimicrobial claim filed within two days of diagnosis were studied to determine antimicrobial prescribing patterns. Of 7357 children meeting the study criteria, 70% were less than three years of age, 65% were Caucasian, and 60% had a rural address. Twenty antimicrobials were prescribed. Amoxicillin was prescribed most frequently (53% of the time), followed by cefaclor; all first-line therapies (amoxicillin, ampicillin, erythromycin-sulfisoxazole, and trimethoprim-sulfamethoxazole) accounted for 64% of the prescriptions, but only one fourth of the costs. The highest use of first-line therapy was associated with children under three years of age; children without prior antimicrobial therapy, recent upper respiratory infection (URI), or recent sinusitis; children seen by emergency department physicians; and children seen by urban physicians. Tennessee Medicaid would have saved +68,250 if first-line therapy had been used for all children having their first occurrence of OM in the fourth quarter alone. The savings to the state were estimated at +300,000 or more in 1993 had first-line therapy been used for most first occurrences of OM in all four quarters plus even a small percentage of the estimated 30,000 remaining repeat OM cases. Amoxicillin was prescribed 53% of the time, and all first-line therapies 64% of the time, for children with their first case of OM in at least nine months. In children without recent antimicrobial therapy, URI, or sinusitis, first-line therapy was still used only 72% of the time.