More data are needed providing strong evidence that nutrition services are cost-effective. Economic evaluations, such as cost-effectiveness analyses, are excellent practice-based research projects. We conducted a cost-effectiveness analysis in a clinical setting to compare the cost-effectiveness of lipid-lowering medications plus diet therapy (medication+diet) with diet therapy alone (diet alone) for treating patients with hypercholesterolemia. Twenty-five adults with hypercholesterolemia (13 receiving medication+diet, 12 receiving diet alone) either participated in an 8-week, home-based, step 1 intervention or were counseled about diet and lifestyle by their care provider. Diet, cost, and laboratory data were collected at baseline, at 9 months, and at 19 months after participation in the intervention (follow-up). Cost per unit change in outcome was evaluated for each group. The diet-alone group made only small changes in dietary intake, changes that were smaller in magnitude than those made by the medication+diet group. Nevertheless, at 9 months, costs per unit change in total serum cholesterol level and low-density lipoprotein cholesterol (LDL-C) level were approximately $24 and $83 less, respectively, for the diet-alone group. At follow-up, however, the cost per unit change in LDL-C level was approximately $17 less for the medication+diet group, which can be explained by the medication+diet group's greater decrease in LDL-C level. The following elements should be considered when conducting a cost-effectiveness analysis of medical nutrition therapy: effectiveness of the nutrition intervention, adequate sample size, confounding variables, compliance with diet and drug therapy, direct and indirect costs of care, and follow-up evaluation. J Am Diet Assoc. 1998;98:1149–1154.