The prevalence of chronic kidney disease and end-stage renal disease requiring dialysis therapy continues to increase worldwide, and despite technological advances, treatment remains resource intensive. Thus, the increasing burden of dialysis therapy on finite health-care budgets is an important consideration. The principles of allocative efficiency and the concept of 'opportunity cost' can be used to assess whether dialysis is economically justified; if dialysis is to be provided, cost-minimization and cost-utility analyses can be used to identify the most efficient dialysis modality. Existing studies have examined the cost, and where relevant the effectiveness, of the various currently available peritoneal dialysis and haemodialysis modalities. In this Review, we discuss variations in the intrinsic costs of the available dialysis modalities as well as other factors, such as variation by country, available health-care infrastructures, the timing of dialysis initiation and renal transplantation. We draw on data from robust micro-costing studies of the various dialysis modalities in Canada to highlight key issues.