OBJECTIVES: Comorbid major depression is associated with reduced quality of life and greater use of healthcare resources. A recent randomised trial (SMaRT, Symptom Management Research Trials, Oncology-2) found that a collaborative care treatment programme (Depression Care for People with Cancer, DCPC) was highly effective in treating depression in patients with cancer. This study aims to estimate the cost-effectiveness of DCPC compared with usual care from a health service perspective. METHODS: Costs were estimated using UK national unit cost estimates and health outcomes measured using quality-adjusted life-years (QALYs). Incremental cost-effectiveness of DCPC compared with usual care was calculated and scenario analyses performed to test alternative assumptions on costs and missing data. Uncertainty was characterised using cost-effectiveness acceptability curves. The probability of DCPC being cost-effective was determined using the UK National Institute for Health and Care Excellence's (NICE) cost-effectiveness threshold range of £ 20,000 to £ 30,000 per QALY gained. RESULTS: DCPC cost on average £ 631 more than usual care per patient, and resulted in a mean gain of 0.066 QALYs, yielding an incremental cost-effectiveness ratio of £ 9549 per QALY. The probability of DCPC being cost-effective was 0.9 or greater at cost-effectiveness thresholds above £ 20,000 per QALY for the base case and scenario analyses. CONCLUSIONS: Compared with usual care, DCPC is likely to be cost-effective at the current thresholds used by NICE. This study adds to the weight of evidence that collaborative care treatment models are cost-effective for depression, and provides new evidence regarding their use in specialist medical settings.