This document presents the current state of evidence on a number of key methodological issues that have arisen around the economic assessment of transport infrastructure and policies with regard to the inclusion of health effects related to walking and cycling. Based on this discussion options and guidance will then be provided towards a more harmonized methodology for the economic appraisal of health effects related to walking and cycling. The guidance has been further developed into an illustrative tool which shows how the methodology can be applied to the assessment of health effects related to cycling. This is introduced in section B of this guidance. The illustrative tool is available as an excel spreadsheet (WHO, 2007a) with accompanying user guide (WHO, 2007b). Section B will explain the assumptions used in the development of the illustrative tool for cycling, and outline the potential limitations of this approach. Finally the possible ways forward for further development of this topic will be discussed. This guidance document represents a first step towards an agreed harmonized methodology. In forming the recommendations within this guidance, it has been necessary for the advisory group to make a number of judgements, sometimes based on incomplete evidence. Feedback is therefore welcome, so that the guidance and illustrative tool can be further developed in the light of user experience and new evidence.