BACKGROUND: In the outpatient management of severe wasting, routine antibiotic therapy is recommended for all children upon admission regardless of whether clinical signs of infection are present. Indicated antibiotic therapy, where antibiotics are provided only upon presentation of clinical signs of infection, may be considered for its potential to allow for more prudent antibiotic use and greater program coverage, reducing the risk of antibiotic resistance as well as costs and logistical burdens associated with treatment. We therefore conducted a cost-effectiveness analysis to measure the effects of indicated antibiotic therapy compared to routine antibiotic therapy in terms of incremental cost-per-life-year saved in Niger. METHODS: We used a cohort model to conduct a cost-effectiveness analysis from a healthcare system perspective to project and weigh the lifetime discounted costs and effects of indicated antibiotic therapy compared to routine antibiotic therapy in the treatment of uncomplicated severe wasting in children in Niger. We calculated incremental cost-effectiveness ratios (ICERs) in terms of treatment-related healthcare costs per discounted life-years saved (LYS), and conducted program coverage scenario and sensitivity analyses to assess model uncertainty. RESULTS: The ICER for indicated antibiotic therapy compared to routine antibiotic therapy was $8.5/LYS, which is under the cost-effectiveness threshold for Niger. The probability of the indicated strategy being optimal was 76.1% when program coverage was equal to coverage associated with routine therapy but was 100% likely to be optimal in probabilistic sensitivity analysis scenarios where indicated program coverage improved 5 percentage points. CONCLUSIONS: Indicated antibiotic therapy likely represents a cost-effective strategy, particularly if indicated treatment can result in expanded coverage. With the risk of increasing antibiotic resistance worldwide, antibiotic stewardship and simplified treatment protocols for severe wasting using indicated antibiotic therapy may represent good value for money in some low risk populations.