Autologous chondrocyte transplantation (ACT) for the treatment of cartilage injuries has been in clinical use for several years. Since this new technique is potentially more costly and invasive than traditional conservative therapies, we evaluated the effect of ACT on clinical outcome, absenteeism, disability status, and total direct economic burden in 57 patients with full-thickness chondral lesions of the knee treated between 1987 and 1996. Patients graded good or excellent following ACT in the treatments groups were: femoral condyles (28/33), femoral condyles with anterior cruciate ligament (ACL) repair (5/5), osteochondritis dissecans (7/8), and patellar lesions (9/11). Pre-ACT, 57/57 patients were disabled and post-ACT (mean follow-up 7.3 years) 44/57 had no sickness, 10/57 had minor disability, and 1/57 was disabled. Two of the 57 patients suffered re-injury during the follow-up time. In the 10-year period prior to ACT, the average cost of absenteeism and surgery was SEK 982,457 ($ 122,807) and SEK 47,000 ($ 5,875), respectively, compared to the post-ACT period where both absenteeism and medical costs were dramatically reduced: SEK 9,508 ($ 1,189) and SEK 7,050 ($ 881), respectively. In conclusion, 49 of the 57 patients improved clinically as a result of the ACT treatment. A dramatic cost-saving effect was demonstrated over a projected 10-year period due to reduced absenteeism and disability.