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Introduction: Many American children do not meet recommendations for moderate to vigorous physical activity (MVPA). Although school-based physical education (PE) provides children with opportunities for MVPA, less than half of PE minutes are typically active. The purpose of this study is to estimate the cost effectiveness of a state "active PE" policy implemented nationally requiring that at least 50% of elementary school PE time is spent in MVPA., Methods: A cohort model was used to simulate the impact of an active PE policy on physical activity, BMI, and healthcare costs over 10 years for a simulated cohort of the 2015 U.S. population aged 6-11 years. Data were analyzed in 2014., Results: An elementary school active PE policy would increase MVPA per 30-minute PE class by 1.87 minutes (95% uncertainty interval [UI]=1.23, 2.51) and cost $70.7 million (95% UI=$51.1, $95.9 million) in the first year to implement nationally. Physical activity gains would cost $0.34 per MET-hour/day (95% UI=$0.15, $2.15), and BMI could be reduced after 2 years at a cost of $401 per BMI unit (95% UI=$148, $3,100). From 2015 to 2025, the policy would cost $235 million (95% UI=$170 million, $319 million) and reduce healthcare costs by $60.5 million (95% UI=$7.93 million, $153 million)., Conclusions: Implementing an active PE policy at the elementary school level could have a small impact on physical activity levels in the population and potentially lead to reductions in BMI and obesity-related healthcare expenditures over 10 years., (Copyright © 2015 American Journal of Preventive Medicine. Published by Elsevier Inc. All rights reserved.)