OBJECTIVES Texas House Bill 790 resulted in the expansion of the newborn screening panel from 7 to 27 disorders. The objective of this study was to estimate the incremental cost-effectiveness of the expanded newborn screening program (27 disorders) compared to the previous standard screening (7 disorders) in Texas. METHODS A Markov model (for a hypothetical cohort of Texas births in 2007) was constructed to compare life-time costs and QALYs between the expanded newborn screening and pre-expansion newborn screening. Estimates of costs, probabilities of sequelae, and utilities for disorder categories were obtained from Texas statistics, the literature, and expert opinion. A baseline discount rate of 3% was used for both costs and QALYs, with a range of 0% to 5%. Analyses were conducted from a payer's perspective, so only direct medical cost estimates were included. RESULTS The life-time incremental cost-effectiveness ratio (ICER) for expanded versus pre-expansion screening was about $11,000/QALY. Probabilistic sensitivity analysis using key variables showed that results ranged from about $9,500 to $13,000 /QALY. This range is well below the commonly cited willingness to pay threshold of $50,000/QALY. CONCLUSIONS Expanded newborn screening does result in additional expense to the payer but also improves patient outcomes by preventing avoidable morbidity and mortality. The screened population benefits from greater QALYs as compared to the unscreened population. Overall, expanded newborn screening in Texas was estimated to be a cost-effective option as compared to unexpanded newborn screening.