We assessed the cost-effectiveness of the female condom (FC) in preventing HIV infection and other STDs among commercial sex workers (CSWs) and their clients in the Mpumulanga Province of South Africa. The health and economic outcomes of current levels of male condom (MC) use in 1000 CSWs who average 25 partners per year and have an HIV prevalence of 50.3% was compared with the expected outcomes resulting from the additional provision of FCs to these CSWs. A simulation model calculated health and public sector cost outcomes assuming 5 years of HIV infectivity, 1 month of syphilis and gonorrhea infectivity, and FC use in 12% of episodes of vaginal intercourse. Delayed infections and interactions between STDs and HIV were modeled. The simulation was extended to non-CSWs with as few as one casual partner per year. We conducted multiple sensitivity analyses. The program would distribute 6000 FCs annually at a cost of $4002 and would avert 5.9 HIV, 38 syphilis, and 33 gonorrhea cases. This would save the public sector health payer $12,090 in averted HIV/AIDS treatment costs, and $1,074 in averted syphilis and gonorrhea treatment costs for a net saving of $9163. Sensitivity analyses indicate that the economic findings are robust across a wide range of values for key inputs. The program generates net savings of $5421 if HIV prevalence in CSWs is 25% rather than 50.3% and savings of S3591 if each CSW has an average of 10 clients per year rather than 25. A program focusing on non-CSWs with only one casual partner would save $199. We conclude that a well-designed FC program oriented to CSWs and other women with casual partners is likely to be highly cost-effective and can save public sector health funds in rural South Africa.