Purpose: Living in a rural region is associated with significant health disparities and increased medical costs. Vitamin D deficiency, which is increasingly common, is also associated with many adverse health outcomes. The purpose of this study was to determine whether rural-urban residence status of veterans was related to vitamin D levels, and to determine if this factor also influenced medical costs/service utilization. Additionally explored was whether vitamin D differences accounted for part of the association between area of residence and medical costs/service utilization. Methods: Medical records of 9,396 veterans from 6 Veterans Administration Medical Centers were reviewed for variables of interest including county of residence, vitamin D level, medical costs and service utilization, and background variables. Rurality status was classified as large metropolitan, urban, and rural. Findings: The 3 rurality status groups differed significantly in vitamin D levels, with the highest levels observed for urban residents, followed by rural residents, and the lowest for large metro residents. Compared with urban residents, large metro residents were 49% more likely, while rural residents were 20% more likely, to be vitamin D deficient. Both rural and large metro residents had higher medical costs, and they were significantly more likely to be hospitalized. Vitamin D levels explained a statistically significant amount of the relationship between rurality status and medical costs/service utilization. Conclusions: Vitamin D deficiency may be an additional health disparity experienced by both rural and inner-city veterans, and patients residing in these locations should be considered at increased risk for deficiency and routinely tested. (Contains 2 tables.)