BACKGROUND AND DESIGN - Australia has the highest rates of skin cancer in the world, and the incidence is estimated to be doubling every 10 years. Despite advances in the early detection and treatment of melanoma about 800 people still die nationally of the disease each year. A possible strategy for further reducing the mortality from melanoma is an organised programme of population screening for unsuspected lesions in asymptomatic people. Arguments against introducing melanoma screening have been based on cost and the lack of reliable data on the efficacy of any screening tests. To date, however, there has been no systematic economic assessment of the cost effectiveness of melanoma screening. The purpose of this research was to determine whether screening may be potentially cost effective and, therefore, warrants further investigation. A computer was used to simulate the effects of a hypothetical melanoma screening programme that was in operation for 20 years, using cohorts of Australians aged 50 at the start of the programme. Based on this simulation, cost-effectiveness estimates of melanoma screening were calculated. RESULTS - Under the standard assumptions used in the model, and setting the sensitivity of the screening test (visual inspection of the skin) at 60%, cost effectiveness ranged from Aust$6853 per life year saved for men if screening was undertaken five yearly to $12 137 if screening was two yearly. For women, it ranged from $11 102 for five yearly screening to $20 877 for two yearly screening. CONCLUSION - The analysis suggests that a melanoma screening programme could be cost effective, particularly if five yearly screening is implemented by family practitioners for men over the age of 50.