We did a cost-effectiveness analysis alongside a cluster-randomised controlled trial of a participatory intervention with women's groups to improve birth outcomes in rural Nepal. The average provider cost of the women's group intervention was US0.75 dollars per person per year (0.90 dollars with health-service strengthening) in a population of 86,704. The incremental cost per life-year saved (LYS) was 211 dollars (251 dollars), and expansion could rationalise on start-up costs and technical assistance, reducing the cost per LYS to 138 dollars (179 dollars). Sensitivity analysis showed a variation from 83 dollars to 263 dollars per LYS for most variables. This intervention could provide a cost-effective way of reducing neonatal deaths.