OBJECTIVES: Compare cost-effectiveness of three non-melanoma skin cancer (NMSC) strategies: all Mohs Micrographic Surgery (MMS), all surgical excision and mixed MMS and excision. METHODS: A decision-analytic model compared strategies using data from a prospective sample (n=540) treated with MMS or excision at a university-affiliated dermatology clinic from 1999-2000.  The newest (2007) Medicare costing rules with tumor size, location and number of stages for MMS were used.  Total cost included the procedure, pathology, drugs, 2 month follow-up visits, secondary procedures, repairs or grafts and recurrences.  Short Form (SF)-12 and Skindex scores at baseline and 2 years were mapped to the Health Utility Index (HUI) to adjust life expectancy and recurrence, our major outcomes.  Cost per quality adjusted life year saved (QALYS) was the final outcome.   Sensitivity analysis tested uncertainty of model parameters. RESULTS: The all MMS strategy was most cost-effective when compared to mixed (ICER=$30,521/QALYS) and all excision strategies (ICER=$6,722/QALYS).  The mixed strategy was cost-effective compared to the all excision strategy (ICER=$1,924/QALYS).  All excision was least costly ($1634.50/patient), mixed next ($1681.00/patient) and all MMS was most costly ($1830.10/patient).  The all MMS strategy (17.2081 QALYS) was most effective compared to mixed (17.2032 QALYS) and all excision (17.1790 QALYS) strategies.  The model is sensitive to the proportion of patients who receive MMS versus excision in the mixed strategy.  The all MMS strategy no longer is cost-effective compared to the mixed strategy when the MMS proportion is decreased from 58.8% to 50% (ICER=$2,793,794) and at 45% the mixed strategy dominates all other strategies.  Not until $900 is added to procedure cost for MMS, does the all MMS strategy lose its cost-effectiveness.  CONCLUSIONS: All MMS for NMSC is the most cost-effective strategy although the mixed strategy is preferred in some mixtures of patient populations.  This analysis demonstrates that MMS is cost-effective if clinically indicated.