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Although the frequency of preoperative autologous blood donation is increasing dramatically, the economic implications of its use remain largely unexplored. Decision analysis was used to calculate the cost-effectiveness of autologous blood donation for hip and knee replacement. Cost-effectiveness, expressed as cost per quality-adjusted year of life saved, was based on observed red cell use in 629 patients undergoing surgery at two tertiary-care centers. Autologous blood donation for bilateral and revision joint replacement cost $40,000 per quality-adjusted year of life saved at Center 1 and $241,000 at Center 2. Autologous blood donation for primary unilateral hip replacement cost $373,000 per quality-adjusted year of life saved at Center 1 and $740,000 at Center 2. Autologous blood donation was least cost-effective for primary unilateral knee replacement ($1,147,000/quality-adjusted year of life saved at Center 1 and $1,467,000/year at Center 2). Differences between autologous blood collections and transfusion requirements explained variations among procedures in the cost-effectiveness of autologous blood donation. Higher transfusion rates in autologous blood donors than in nondonors accounted for the poorer cost-effectiveness of autologous blood donation at Center 2 than at Center 1. Autologous blood donation is not as cost-effective as most accepted medical practices. Its cost-effectiveness can be improved substantially by the avoidance of overcollection and overtransfusion of autologous blood.