The principles of cost-effectiveness analysis are straightforward and can be applied to set priorities among competing uses for resources. This article examines the relationship between serum cholesterol and coronary heart disease (CHD) risk, drawing on information from a number of large intervention trials. The cost-effectiveness of treatment alternatives for elevated serum cholesterol, hypertension, and symptomatic CHD are compared. Concern is expressed that the guidelines issued by the National Cholesterol Education Program extend beyond the available evidence and do not adequately take into account problems with adherence to diet and drug regimens or the cost of widespread implementation. The cost-effectiveness of drug treatment for both high cholesterol and hypertension depends on the populations at which they are targeted.