Dialysis patients have a high risk of cardiovascular disease. Cardiac rehabilitation is recommended in the general population as a standard component of care and covered by Medicare for those who have undergone coronary artery bypass grafting (CABG). Here we determined the impact of cardiac rehabilitation on Medicare expenditures and its cost effectiveness in dialysis patients. A cohort of 4,324 patients with end-stage renal disease who began chronic hemodialysis and had undergone CABG over a seven year period were selected from the United States Renal Data System. Cardiac rehabilitation was defined by Current Procedural Terminology codes for monitored and non-monitored exercise in Medicare claims data. Medicare expenditures included in and outpatient claims adjusted to 1998 dollars. Over a 42-month follow-up, cardiac rehabilitation at baseline was associated with higher cumulative Medicare expenditures but this increase was not statistically significant. During the same period, cardiac rehabilitation was significantly associated with longer cumulative life, having an incremental benefit of 76 days. The incremental cost-effectiveness ratio of $13,887 per year of life saved suggests that cardiac rehabilitation is highly cost-effective in patients with end-stage renal disease following CABG.