OBJECTIVES: Determine the cost-effectiveness of small intestinal submucosa extracellular matrix (SISEM)* relative to human fibroblast-derived dermal substitute (HF-DDS)^†on wound closure for the treatment of diabetic foot ulcers (DFUs).   METHODS: A 2-stage Markov model was used to predict the expected costs and outcomes of wound closure for SISEM and HF-DDS. Outcome data used in the analysis were taken from a 12-week randomized clinical trial that directly compared SISEM and HF-DDS. Twenty-six patients completed the study; 13 for SISEM and 13 for HF-DDS. The primary outcome of interest was ulcer-free days. Transition probabilities for the Markov states were estimated from the clinical trial. Resource utilization was based on the treatment regimen used in the clinical trial. Costs were derived from standard cost references and medical supply wholesalers. The economic perspective taken was that of the payer. No cost discounting was performed due to the short duration of the study. RESULTS: Ten wounds closed in the SISEM group (77%), with an average time to closure of 36 days, while 11 wounds closed in the HF-DDS group (85%), with an average closure time of 41 days. No significant difference was found in the time to closure or in the percentage of wound closure between the two groups (p=0.73). Expected direct costs per patient for DFU were $2,949 for SISEM and $5,282 for HF-DDS. Patients treated with HF-DDS incurred total treatment costs that were approximately 1.8 times higher than those treated with SISEM. The estimated cost per ulcer-free day was more than 1.5 times higher HF-DDS vs. SISEM.  CONCLUSIONS: SISEM yielded similar outcomes at a lower cost in patients with DFU.  Health care providers should consider SISEM as a cost-saving alternative to HF-DDS. *OASIS®, Smith & Nephew Biotherapeutics, Fort Worth, Texas †Dermagraft®, Shire Regenerative Medicine Inc., San Diego, California