INTRODUCTION: Many HIV-positive individuals in Africa have advanced disease when initiating antiretroviral therapy (ART) so have high risks of opportunistic infections and death. The REALITY trial found that an enhanced-prophylaxis package including fluconazole reduced mortality by 27% in individuals starting ART with CD4 <100 cells/mm3 . We investigated the cost-effectiveness of this enhanced-prophylaxis package versus other strategies, including using cryptococcal antigen (CrAg) testing, in individuals with CD4 <200 cells/mm3 or <100 cells/mm3 at ART initiation and all individuals regardless of CD4 count. METHODS: The REALITY trial enrolled from June 2013 to April 2015. A decision-analytic model was developed to estimate the cost-effectiveness of six management strategies in individuals initiating ART in the REALITY trial countries. Strategies included standard-prophylaxis, enhanced-prophylaxis, standard-prophylaxis with fluconazole; and three CrAg testing strategies, the first stratifying individuals to enhanced-prophylaxis (CrAg-positive) or standard-prophylaxis (CrAg-negative), the second to enhanced-prophylaxis (CrAg-positive) or enhanced-prophylaxis without fluconazole (CrAg-negative) and the third to standard-prophylaxis with fluconazole (CrAg-positive) or without fluconazole (CrAg-negative). The model estimated costs, life-years and quality-adjusted life-years (QALY) over 48 weeks using three competing mortality risks: cryptococcal meningitis; tuberculosis, serious bacterial infection or other known cause; and unknown cause. RESULTS: Enhanced-prophylaxis was cost-effective at cost-effectiveness thresholds of US$300 and US$500 per QALY with an incremental cost-effectiveness ratio (ICER) of US$157 per QALY in the CD4 <200 cells/mm3 population providing enhanced-prophylaxis components are sourced at lowest available prices. The ICER reduced in more severely immunosuppressed individuals (US$113 per QALY in the CD4 <100 cells/mm3 population) and increased in all individuals regardless of CD4 count (US$722 per QALY). Results were sensitive to prices of the enhanced-prophylaxis components. Enhanced-prophylaxis was more effective and less costly than all CrAg testing strategies as enhanced-prophylaxis still conveyed health gains in CrAg-negative patients and savings from targeting prophylaxis based on CrAg status did not compensate for costs of CrAg testing. CrAg testing strategies did not become cost-effective unless the price of CrAg testing fell below US$2.30. CONCLUSIONS: The REALITY enhanced-prophylaxis package in individuals with advanced HIV starting ART reduces morbidity and mortality, is practical to administer and is cost-effective. Efforts should continue to ensure that components are accessed at lowest available prices.