Becaplermin (Regranex(r)), a recombinant human platelet-derived growth factor, and graftskin (Apligraf(r)), a bilayered tissue-engineered human skin equivalent, promote the local wound healing process and therefore reduce the time to complete healing and rate of amputation of lower extremity in diabetic foot ulcer patients. However, very limited information is available for the relative cost-effectiveness of these new treatments. OBJECTIVES: To evaluate the cost-effectiveness of graftskin plus standard foot care and becaplermin plus standard foot care in comparison to the standard foot care alone from the societal perspective. METHODS: A decision analysis model was built for chronic diabetic foot ulcer patients. Study period was one year. The effectiveness was measured in quality-adjusted-life years (QALYs). Data for QALYs, transition probabilities, efficacy, and costs were taken mostly from the literature. All costs were adjusted to 2002 US dollars. Sensitivity analyses were performed on important parameters including costs and efficacy of graftskin and becaplermin, and costs of amputation. RESULTS: In the base case analysis, graftskin was a dominant strategy over becaplermin and standard care. Also, becaplermin was the dominant strategy over standard care alone. Compared to the standard care group and the becaplermin group, the graftskin group had higher QALYs (difference was 0.03 and 0.06, respectively). In terms of savings of medical costs, the graftskin group gained $2202 and $179, compared to the standard care group and the becaplermin group during the study period. The results of the sensitivity analysis were consistent with the results of the base case analysis. CONCLUSIONS: Although the standard care costs less at the initial state, patients receiving the standard care only are more likely to have costly outcomes compared to patients receiving graftskin or becaplermin, and this translates into higher expected costs. Also, results indicate that treating diabetic foot ulcer patients with graftskin was more cost-effective than treating with becaplermin.