Although in developing countries the treatment of tuberculosis (TB) cases is among the most cost-effective health interventions, few studies have evaluated the cost-effectiveness of TB control in low-prevalence countries. The aim of the present study was to carry out an economic analysis in Italy that takes into account both the perspective of the resource-allocating authority (i.e. the Ministry of Health) and the broader social perspective, including a cost description based on current outcomes applied to a representative sample of TB patients nationwide (admission and directly observed treatment (DOT) during the initial intensive phase of treatment); a cost-comparison analysis of two alternative programmes: current policy based on available data (scenario 1) and an hypothetical policy oriented more towards outpatient care (scenario 2) (both scenarios included the option of including or not including DOT outside hospital admission, and incentives) were compared in terms of cost per case treated successfully. Indirect costs (such as loss of productivity) were included in considerations of the broader social perspective. The study was designed as a prospective monitoring activity based on the supervised collection of forms from a representative sample of Italian TB units. Individual data were collected and analysed to obtain a complete economic profile of the patients enrolled and to evaluate the effectiveness of the intervention. A separate analysis was done for each scenario to determine the end-point at different levels of cure rate (50-90%). The mean length of treatment was 6.6 months (i.e. patients hospitalized during the intensive phase; length of stay was significantly higher in smear-positive patients and in human immunodeficiency virus (HIV) seropositive patients). Roughly six direct smear and culture examinations were performed during hospital admission and three during ambulatory treatment. The cost of a single bed day was US$186.90, whereas that of a single outpatient visit ranged, according to the different options, from US$2.50 to US$11. Scenario 2 was consistently less costly than scenario 1. The cost per case cured for smear-positive cases was US$16,703 in scenario 1 and US$5946 in scenario 2. The difference in cost between the cheapest option (no DOT) and the more expensive option (DOT, additional staff, incentives) ranged from US$1407 (scenario 1, smear-negative and extrapulmonary cases) to US$1814 (scenario 2, smear-positive cases). The additional cost to society including indirect costs ranged from US$1800 to US$4200. The possible savings at the national level were in the order of US$50 million per year. In conclusion, cost-comparison analysis showed that a relatively minor change in policy can result in significant savings and that the adoption of DOT will represent a relatively modest economic burden, although the real gain in effectiveness resulting from DOT in Italy requires further evaluation.