OBJECTIVES: This paper aims to compare changes over 2 years in patients' health-related quality of life (HRQL) with the health and social care costs of diagnosis and treatment of people newly referred to memory assessment services (MAS). METHODS: We analysed observational data from 1318 patients referred to 69 MAS who completed resource use and HRQL questionnaires at baseline 3, 6, 12, and 24 months. We reported mean differences in HRQL (disease-specific DEMQOL and generic EQ-5D-3 L), quality-adjusted life years (QALYs), costs and cost-effectiveness between baseline, and 2-year follow-up. RESULTS: Two years after referral to MAS, patients reported a higher DEMQOL score (mean gain 4.47, 95% confidence interval, 3.08-5.90) and EQ-5D-3 L (0.014, -0.011 to 0.039). Mean total costs and QALYs over 24 months was £2411 (£1721-£2873) and 0.027 (0.003-0.051), respectively. Assuming that patients' HRQL would not have altered over the 2 years had they not attended MAS, these outcomes suggest an incremental cost-effectiveness ratio of £89 546 (£38 123-£145 864) based on changes in EQ-5D-3 L. If we assumed that patients' HRQL would have declined by about 10% over this period had they not attended MAS, the cost-effectiveness ratio would be £25 056. The largest MAS (N = 32; 46%) with over 50 new patients a month were more likely to be cost-effective than smaller ones (P < 0.01). CONCLUSIONS: MAS are effective and can be cost-effective for diagnosing and treating people with suspected dementia. Large variations in costs between clinics suggest that many MAS could improve their cost-effectiveness.