The rate of immediate breast reconstruction (IBR) following mastectomy for breast cancer in Australia is low and varies between regions. To date, no previous Australian studies have examined IBR rates between all hospitals within a particular jurisdiction, despite hospitals being an important known contributor to variation in IBR rates in other countries.We used cross-classified random-effects logistic regression models to examine the inter-hospital variation in IBR rates by using data on 7961 women who underwent therapeutic mastectomy procedures in New South Wales (NSW) between January 2012 and June 2015. We derived IBR rates by patient-, residential neighbourhood- and hospital-related factors and investigated the underlying drivers for the variation in IBR.We estimated the mean IBR rate across all hospitals performing mastectomy to be 17.1% (95% Bayesian credible interval (CrI) 12.1-23.1%) and observed wide inter-hospital variation in IBR (variance 4.337, CrI 2.634-6.889). Older women, those born in Asian countries (odds ratio (OR) 0.5, CrI 0.4-0.6), residing in neighbourhoods with lower socioeconomic status (OR 0.7, CrI 0.5-0.8 for the most disadvantaged), and who underwent surgery in public hospitals (OR 0.4, CrI 0.1-1.0) were significantly less likely to have IBR. Women residing in non-metropolitan areas and attending non-metropolitan hospitals were significantly less likely to undergo IBR than their metropolitan counterparts attending metropolitan hospitals.Wide inter-hospital variation raises concerns about potential inequities in access to IBR services and unmet demand in certain areas of NSW. Explaining the underlying drivers for IBR variation is the first step in identifying policy solutions to redress the issue.