OBJECTIVES: Because little is known about the cost effectiveness of exercise therapy, general practitioners lack the knowledge to apply the most cost effective treatment to patients with the patellofemoral pain syndrome (PFPS). Therefore, we aimed to determine the cost effectiveness of exercise therapy (intervention group) compared to ‘usual care’ (control group) in adolescents and young adults dealing with PFPS in primary care. METHODS: This multicenter prospective cost-utility analysis was conducted at 38 general practices and 3 sport medical advice centers in the Netherlands for 2007. A total of 131 patients between 14 and 40 years of age presenting with symptoms of PFPS and no history of previous active treatment were recruited. Direct medical and productivity costs were included for the follow up duration of one year. RESULTS: The annual direct medical costs per patient were significantly higher for the intervention group (€434) compared to the control group (€299), mainly caused by additional physiotherapy visits. Productivity costs amounted to €577 (SD2384) and €867 (SD2192) for the two groups respectively, resulting in annual societal costs per patient which were significantly lower in the intervention group (€ 1,011 versus €1.166). Productivity costs due to reduced efficiency at paid work were responsible for 47% of the total costs in the intervention and 56% and in the control group. Patients in the intervention group experienced a slightly, but not significantly, higher quality of life (0.8722 versus 0.8617). CONCLUSIONS: When only direct medical costs were included, average costs per quality adjusted life year (QALY) were €12,754. However, with a societal average cost effectiveness ratio of - €14,738 per QALY, exercise therapy appears to be cost effective as compared to ‘usual care’. The intervention was dominant in 52% of the cases (positive health effects and cost savings) and inferior in 14%.