BACKGROUND: The presumptive approach of confirming malaria in health facilities leads to over-diagnosis of malaria, over use of anti-malaria drugs and the risk of drug resistance development. WHO recommends parasitological confirmation before treatment with artemisinin-based combination therapy (ACT) in all suspected malaria patients. The use of malaria rapid diagnostic tests (mRDTs) would make it possible for prescribers to diagnose malaria at point-of-care and better target the use of antimalarials. Therefore, a cost-effectiveness analysis was performed on the introduction of mRDTs for management of malaria in under-five children in a high transmission area in Ghana where presumptive diagnosis was the norm in public health centres. METHODS: A cluster-randomised controlled trial where thirty-two health centres were randomised into test-based diagnosis of malaria using mRDTs (intervention) or clinical judgement (control) was used to measure the effect of mRDTs on appropriate treatment: 'a child with a positive reference diagnosis prescribed a course of ACT or a child with a negative reference diagnosis not given an ACT'. Cost data was collected from five purposively selected health centres and used to estimate the health sector costs of performing an mRDT and treat children for malaria and other common febrile illnesses. Costs of training healthcare personnel and supervision in the study period were also collected. A sample of caregivers to children participating in the trial was interviewed about household cost incurred on transport, drugs, fees, and special food during a period of one week after the health centre visit as well as days unable to work. A decision model approach was used to calculate the incremental cost-effectiveness ratios (ICERs). Univariate and multivariate sensitivity analyses were applied to assess the robustness of ICERs. RESULTS: The availability of mRDTs for malaria diagnosis resulted in fewer ACT treatments compared to the clinical judgement approach (73% versus 81%) and more children appropriately treated (70% versus 57%). The introduction of mRDT-based diagnosis would cost the Ministry of Health US$18.6 per extra appropriately treated child under five compared to clinical judgement while the ICER from a societal perspective was lower at US$11.0 per appropriately treated child. ICERs were sensitive to a decrease in adherence to negative mRDTs, malaria positivity rate and specificity of the mRDT. CONCLUSION: The introduction of mRDTs is likely to be considered cost-effective in this high transmission setting as this intervention increased the number of appropriately treated children at low cost. TRIAL REGISTRATION: ClinicalTrials.gov NCT00832754.