OBJECTIVE: This article provides the estimates of the cost implications of switching from routine to restrictive episiotomy in 2 provinces in Argentina (Santa Fe and Salta) from the viewpoint of the health provider. STUDY DESIGN: A decision-tree model was constructed that used the probabilities and patient outcomes (the results of a trial in Argentina), resource use, cost, and local epidemiologic data from interviews with obstetricians in the selected provinces and from literature reviews. Probabilistic sensitivity analysis was conducted, which provided 90% confidence ranges for the cost data. RESULTS: For each low-risk vaginal delivery, there is a potential reduction in provider cost of $20.21 (range, $19.36-$21.09) with a restrictive policy of episiotomy in Santa Fe province and a reduction of $11.63 (range, $10.89-$12.42) in Salta province. CONCLUSION: The more effective policy of restrictive episiotomy is also less costly than that of routine episiotomy. The results are robust and consistent in both provinces. Further research is required to confirm the appropriate indications for episiotomy and the impact on outcomes of variations in episiotomy cost rates.