Injury sustained through falling is a significant risk for the elderly and a significant burden on the health service. Although many risk factors have been detected and interventions proposed, there remains limited evidence concerning the cost-effectiveness of fall prevention. This study addressed the cost-effectiveness of a home assessment and modification program hypothesised to reduce risk of falling for the independent elderly. Due to a lack of direct clinical trial evidence concerning such an intervention, a decision analytic model was developed to simulate the potential costs and outcomes of the intervention. The model was developed using available published literature concerning injury in the elderly, focusing on Australian data where possible. Cost-effectiveness was estimated as the cost per fall prevented and cost per injury prevented. Over a one-year period, the incremental cost of introducing the intervention was $172 per person, resulting in an incremental cost per fall prevented of $1,721 and cost per injury prevented of $17,208. Over a 10-year period, the intervention resulted in a cost saving of $92 per person (i.e. dominance, with cost savings in addition to reduced falls and injuries). This analysis indicates that there is potential for considerable benefit to be gained from this intervention, in terms of less morbidity, fewer hospitalisations and, possibly, improved quality of life. However, these results are based on a model constructed from various data sources and assumptions so, although results are indicative, further research is required to provide firm data before definitive policy conclusions and recommendations may be made.