Objectives To investigate how well intellectual disability (ID) can be ascertained using hospital morbidity data compared with a population-based data source. Design, setting and participants All children born in 1983-2010 with a hospital admission in the Western Australian Hospital Morbidity Data System (HMDS) were linked with the Western Australian Intellectual Disability Exploring Answers (IDEA) database. The International Classification of Diseases hospital codes consistent with ID were also identified. Main outcome measures The characteristics of those children identified with ID through either or both sources were investigated. Results Of the 488 905 individuals in the study, 10 218 (2.1%) were identified with ID in either IDEA or HMDS with 1435 (14.0%) individuals identified in both databases, 8305 (81.3%) unique to the IDEA database and 478 (4.7%) unique to the HMDS dataset only. Of those unique to the HMDS dataset, about a quarter (n=124) had died before 1 year of age and most of these (75%) before 1 month. Children with ID who were also coded as such in the HMDS data were more likely to be aged under 1 year, female, non-Aboriginal and have a severe level of ID, compared with those not coded in the HMDS data. The sensitivity of using HMDS to identify ID was 14.7%, whereas the specificity was much higher at 99.9%. Conclusion Hospital morbidity data are not a reliable source for identifying ID within a population, and epidemiological researchers need to take these findings into account in their study design.