Modern dressings such as hydrocolloids, gels, and foams are typically more expensive than traditional dressings such as gauze. However, if modern dressings require fewer changes, the overall cost of treatment may be lower despite the higher initial purchase price. If healing rates are comparable or better, modern dressings also may be cost-effective. A 4-week, prospective, randomized clinical trial to assess differences in treatment costs and cost-effectiveness between a modern foam dressing and saline-soaked gauze was conducted among 36 patients (22 men, 14 women, mean age 72.8 years) with a Stage II pressure ulcer (mean duration 35 weeks) at five centers in the United States. Participants were randomized to treatment with a self-adhesive polyurethane foam (n = 20) or saline-soaked gauze dressing (n = 16). No difference in time to wound closure was observed (P = 0.817). Patients in the foam group had less frequent dressing changes (P <0.001). Total cost over the study period was lower by $466 per patient (P = 0.055) and spending on dressings was lower by $92 per patient in the foam group (P = 0.025). Cost per ulcer healed was lower by $1,517 and cost per ulcer-free day was lower by $80 for patients in the foam group. On the evidence of this study, the foam dressing is a more cost-effective treatment than saline-soaked gauze for the treatment of Stage II pressure ulcers.