Background: Heart failure is the leading cause for hospital readmission, the reduction of which is a priority under the Affordable Care Act. Digoxin reduces 30-day all-cause hospital admission in chronic systolic heart failure. Whether digoxin is effective in reducing readmission after hospitalization for acute decompensation remains unknown. Methods: Of the 5153 Medicare beneficiaries hospitalized for acute heart failure and not receiving digoxin, 1054 (20%) received new discharge prescriptions for digoxin. Propensity scores for digoxin use, estimated for each of the 5153 patients, were used to assemble a matched cohort of 1842 (921 pairs) patients (mean age, 76 years; 56% women; 25% African American) receiving and not receiving digoxin, who were balanced on 55 baseline characteristics. Results: Thirty-day all-cause readmission occurred in 17% and 22% of matched patients receiving and not receiving digoxin, respectively (hazard ratio [HR] for digoxin, 0.77; 95% confidence interval [CI], 0.63-0.95). This beneficial association was observed only in those with ejection fraction <45% (HR 0.63; 95% CI, 0.47-0.83), but not in those with ejection fraction ≥45% (HR 0.91; 95% CI, 0.60-1.37; P for interaction,.145), a difference that persisted throughout the first 12 months postdischarge (P for interaction,.019). HRs (95% CIs) for 12-month heart failure readmission and all-cause mortality were 0.72 (0.61-0.86) and 0.83 (0.70-0.98), respectively. Conclusions: In Medicare beneficiaries with systolic heart failure, a discharge prescription of digoxin was associated with lower 30-day all-cause hospital readmission, which was maintained at 12 months, and was not at the expense of higher mortality. Future randomized controlled trials are needed to confirm these findings. © 2014 Elsevier Inc. All rights reserved.