BACKGROUND: Major depression is common in older adults and is associated with increased health care costs. Depression often remains unrecognized in older adults, especially in primary care. OBJECTIVE: To evaluate the cost-effectiveness of a disease management program for major depression in elderly primary care patients compared with usual care. DESIGN: Economic evaluation alongside a cluster randomized-controlled trial. PARTICIPANTS: Consecutive patients of 55 years and older were screened for depression using the Geriatric Depression Scale and the PRIME-MD was used for diagnosis. INTERVENTIONS: General practitioners in the intervention group received training on how to implement the disease management program consisting of screening, patient education, drug therapy with paroxetine, and supportive contacts. General practitioners in the usual care group were blind to the screening results. Treatment in this group was not restricted in any way. MEASUREMENTS: Severity of depression, recovery from depression, and quality of life. Resource use measured over a 12-month period using interviews and valued using standard costs. RESULTS: Differences in clinical outcomes between the intervention and usual care group were small and statistically insignificant. Total costs were $2,123 in the intervention and $2,259 in the usual care group (mean difference -$136, 95% confidence interval: -$1,194; $1,110). Cost-effectiveness planes indicated that there were no statistically significant differences in cost-effectiveness between the 2 groups. CONCLUSIONS: This disease management program for major depression in elderly primary care patients had no statistically significant relationship with clinical outcomes, costs, and cost-effectiveness. Therefore, based on these results, continuing usual care is recommended.