OBJECTIVES: To evaluate the cost-effectiveness of an intervention, Advancing Better Living for Elders (ABLE), which was shown to reduce mortality in community-dwelling elders in a randomized trial. METHODS:  319 community-living older adults randomized to ABLE or no-treatment control group, were included in the economic analysis. ABLE involved occupational and physical therapy home and telephone sessions and home modifications (e.g., grab bars) to address functional difficulties over 12 months. Using a home-care agency perspective, the incremental cost-effectiveness ratio (ICER) was expressed as the additional cost to bring about one additional year of life.  To account for potential variations in costs of implementing ABLE in different settings, two models were developed: cost of implementing ABLE and cost +10%. Probabilistic sensitivity analysis was conducted to account for variation on model parameters. Confidence intervals for the ICERs were calculated using the Fieller theorem method. RESULTS:   Total cost of ABLE per participant after discounting was $908. In the secondary cost-effectiveness analyses total cost after discounting equaled (+10%) $999. By 2 years, there were 30 deaths (9 in ABLE and 21 in Control). Life year saved for ABLE was .944 compared to .868 for the intervention.   Under assumptions of models 1 and 2 the additional costs for 1 additional year of life were $12,985 (95% CI: $4,637-$87,905); and $14,271 (95% CI: $5,068-$107,539); respectively. CONCLUSIONS: This economic evaluation suggests that investment in this program may be worth while depending on ones willingness to pay.  However, confidence intervals varied widely due to small effect in reducing mortality.