OBJECTIVE: Intranasal influenza vaccine has proven clinical efficacy and may be better tolerated by young children and their families than an injectable vaccine. This study determined the potential cost-effectiveness (CE) of intranasal influenza vaccine among healthy children. METHODS: The CE analysis included clinical and medical utilization data collected in 1996-8 during a prospective 2-year efficacy trial of intranasal influenza vaccine. These data were supplemented with data from the literature where necessary. The analysis included both direct and indirect costs. The trial enrolled 1,602 healthy children 15-71 months of age in year 1, 1,358 of whom were enrolled in year 2. Children received 1 or 2 doses of either intranasal influenza vaccine or placebo. The main outcome measure was cost per febrile influenza-like illness (ILI) day avoided. The base case assumed that the vaccine was given twice in the first year and once each year thereafter at a total cost of $20 for the vaccine and its administration (i.e. per dose). RESULTS: Vaccinated children had an average of 1.2 fewer ILI fever days over 2 years than unvaccinated children. In an individual-based vaccine delivery scenario, CE was approximately $30/febrile ILI day avoided with the vaccine, and ranged from $10-$59/febrile ILI day avoided at a cost per dose of $10-$35, respectively. In a group-based delivery scenario, vaccination was cost-saving compared to no vaccine and remained so if the vaccine cost was