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There is wide variation in the utilization of Intensive Care Unit (ICU) beds for treatment and monitoring of adult patients with Diabetic Ketoacidosis (DKA). We sought to compare the outcomes and hospital costs of adult DKA patients admitted to ICUs as compared to those admitted to step-down units.We included consecutive adult patients from two hospitals with a diagnosis of DKA. Patients were either admitted to the ICU, or a step-down unit, which has a nurse-to-patient ratio of 2:1, but does not have capability for mechanical ventilation or administration of vasoactive agents. The primary outcome was in-hospital mortality.We included 872 patients in the analysis. 71 (8.1%) were admitted to ICU, while 801 (91.9%) were admitted to a step-down unit. We found no difference in in-hospital mortality between patients admitted to the ICU and those admitted to the step-down unit (adjusted odds ratio [OR]: 1.14, 95% confidence interval [CI]: 0.87–2.64). Mean total hospital costs were significantly higher for patients admitted to the ICU ($20,428 vs. $6484, P<0.001).Adult DKA patients admitted to a step-down unit had comparable in-hospital mortality and lower hospital costs as compared to those admitted to the ICU.In some centers, all Diabetic Ketoacidosis (DKA) patients are admitted to ICU.No difference in in-hospital mortality was found between DKA patients admitted to step-down units or ICU.DKA patients admitted to step-down units had significantly lower costs than those admitted to ICU.Hospitals should preferentially consider monitoring of DKA patients in step-down units.