Heart failure is the leading cause of hospitalization in adults older than 65 years, and it is currently the most costly cardiovascular disorder in the United States, with estimated annual expenditures in excess of $20 billion. Recent studies have shown that selected pharmacological agents, behavioral interventions, and surgical therapies are associated with improved clinical outcomes in patients with heart failure, but the cost implications of these diverse treatment modalities are not widely appreciated. In this review, a brief outline of cost-effectiveness analysis is provided, and current data on the cost-effectiveness of specific approaches to managing heart failure are discussed. Available evidence indicates that angiotensin converting enzyme inhibitors, other vasodilators, digoxin, carvedilol, multidisciplinary heart failure management teams, and heart transplantation are all cost-effective approaches to treating heart failure; moreover, some of these interventions may result in net cost savings.