The inhaled Steroid Treatment As Regular Therapy in early asthma (START) study has shown that early intervention with inhaled budesonide in mild persistent asthma improves clinical outcomes in both adults and children. The aim of this study was to estimate the incremental cost-effectiveness of early treatment with budesonide Turbuhaler in children aged 5-10 yr who participated in START. Direct and indirect costs associated with asthma were determined for 1974 children participating in the double-blind, 3-year part of the study. Randomization was to placebo or to budesonide 200 microg once daily in each case in addition to usual asthma care. Cost-effectiveness ratios were calculated from the healthcare payer's and societal perspectives (using US prices). The addition of once-daily budesonide therapy to usual asthma care was associated with 16 additional symptom-free days (SFDs) per child over the 3-yr period (p < 0.001), with a substantial reduction (50%) in the mean number of days spent in hospital, and with reduced frequency of emergency room visits and missed school and caregiver work days. From the healthcare payer's perspective (direct costs), the increase in mean direct cost over 3 yr with budesonide was 169 dollars, which translated into an incremental cost of early intervention with budesonide in children of 10.50 dollars (95% CI 1.20-33.30 dollars) per SFD gained. From the societal perspective, there was a cost reduction over 3 yr of 192 dollars with budesonide relative to placebo. From a societal perspective, budesonide was therefore dominant. In conclusion, early intervention with once-daily budesonide added to usual asthma care in children with mild persistent asthma is cost-saving from a societal perspective and is acceptably cost-effective when viewed from a healthcare payer perspective.