Unrelated donor transplantation prolongs survival in some patients with chronic myelogenous leukemia (CML) in chronic phase. However, there are growing concerns about the intensive resources required for this procedure given health care budget constraints. To address this issue, we conducted a study of the costs and cost-effectiveness of unrelated donor transplantation for chronic phase CML. The costs of transplantation were derived from 157 patients from the Brigham and Women's Hospital (BWH) and the Fred Hutchinson Cancer Research Center (FHCRC). Estimates of the effectiveness of transplantation were taken from our previous work using data from the International Bone Marrow Transplant Registry and the National Marrow Donor Program. The median cost of the first 6 months of care including donor identification, marrow collection, patient hospitalization for transplantation and all outpatient medications and readmissions through 6 months postmarrow infusion was $178,500 (range, $85,000 to $462,400) and the mean was $196,200. Mean costs for patients surviving beyond 6 months posttransplant were significantly lower than for patients dying within that period ($189,700 v $211,000, respectively, P=.03). Posttransplant follow-up costs were high for months 6 to 18, then decreased. The incremental cost- effectiveness of transplantation within 1 year of diagnosis versus α- interferon therapy without transplant in the base case of a 35-year-old patient was $51,800/quality-adjusted life year (QALY) gained. Sensitivity analysis showed that most ratios were between $50,000 to $100,000/QALY or within the intermediate zone of acceptable cost-effectiveness ratios.