We evaluated the cost-effectiveness of routine dilated fundus examination in improving visual outcomes. The cost of routine dilated fundus examination was related to the number of preventable cases of vision-threatening peripheral retinal disease. Patients with these diseases who had no risk factors were ascertained in a population of 1.75 million adults for a period of 6 months. Those whose last examination had been undilated were identified because only for them could routine dilated examination (RDE) have been substituted for undilated examination. The number of preventable cases was calculated for multiples of a 10% probability of prevention. The cost of RDE was determined from the number of undilated examinations in the same population and period and the cost of a single RDE. The number of patients who underwent undilated examination was estimated by random medical record review. The additional cost of a single RDE was determined from estimated examination times and payroll costs. Among patients without risk factors, 38 were identified for whom undilated examination rather than RDE had been performed. If prevention had been 10% effective, the substitution of 50,000 RDEs for undilated examinations costing the provider $433,000 would have been required per prevented case. These results suggest that most peripheral retinal diseases cannot be prevented by RDE. Routine dilated examination is an expensive test per prevented case. Published clinical guidelines lack evidence to recommend its use.