Background: The aim of this study is to estimate the cost of care and treatment for extremely low birth weight (ELBW) neonates admitted to a teaching and referral hospital. This cost estimation project can help health policy makers and planners make decisions and develop plans for perinatal service staging programs and better management of NICUs (Neonatal Intensive Care Units). Methods: This cohort study performed on 50 extremely low birth weight neonates (w . 1000gr) born in Vali-e Asr Hospital, Tehran-Iran in the period of March 2012 to September 2013. This teaching and referral hospital had 15 NICU beds as well as an active neonatal growth and development follow-up clinic with a pediatric neurodevelopment specialist during the period of the study. Cases would undergo initial developmental visits and preventative measures immediately after being admitted to the ward. Also after discharge, they were followed up monthly for six months and then every two months, during first year of life. Results: Overalls, 23 newborns -46% of ELBW and 40% of total neonatal mortality rate (that amounted 55) died during hospital stay. Beside hospitalization, the major part of expenses was related to medication and medical supplies. All neonates needing rehabilitation underwent this type of intervention for one year. The mean cost of rehabilitation in neonates with no insurance coverage was 6700 US Dollars per year, which is reduced by half (3350 US Dollars) when covered by insurance. Conclusion: Medication, medical supplies and equipment cost was significantly high. This is especially due to the fact that the present types of insurances do not cover such expenses very well, forcing parents to pay themselves. Insurance systems are expected to take this issue into immediate account.