The cost-effectiveness of the Mallory Head (Biomet, Warsaw, IN) cemented versus noncemented total hip arthroplasty was determined as part of a randomized trial. Costs were assessed during the first postoperative year. In-hospital resource use was determined using a chart review of 60 randomly selected patients. Costs were determined using a fully allocated costing model. Outpatient resource use was determined using patient diaries, and appropriate costs were allocated for outpatient visits, admissions to hospital, and patient-borne costs. There was no difference in costs between the cemented and noncemented prostheses. The average cost of the initial hospitalization was $9,990 (1988 Canadian dollars), and outpatient costs during the first year were $1,137 (total cost during the first year was $11,127). The cost per quality adjusted life year was $27,139 during the first year and $8,031 during the first 3 years.