Purpose Clinical guidelines recommend that people at high risk of melanoma receive regular surveillance to improve survival through early detection. A specialized High Risk Clinic in Sydney, Australia was found to be effective for this purpose; however, wider implementation of this clinical service requires evidence of cost-effectiveness and data addressing potential overtreatment of suspicious skin lesions. Patients and Methods A decision-analytic model was built to compare the costs and benefits of specialized surveillance compared with standard care over a 10-year period, from a health system perspective. A high-risk standard care cohort was obtained using linked population data, comprising the Sax Institute's 45 and Up cohort study, linked to Medicare Benefits Schedule claims data, the cancer registry, and hospital admissions data. Benefits were measured in quality-adjusted life-years gained. Sensitivity analyses were undertaken for all model parameters. Results Specialized surveillance through the High Risk Clinic was both less expensive and more effective than standard care. The mean saving was A$6,828 (95% CI, $5,564 to $8,092) per patient, and the mean quality-adjusted life-year gain was 0.31 (95% CI, 0.27 to 0.35). The main drivers of the differences were detection of melanoma at an earlier stage resulting in less extensive treatment and a lower annual mean excision rate for suspicious lesions in specialized surveillance (0.81; 95% CI, 0.72 to 0.91) compared with standard care (2.55; 95% CI, 2.34 to 2.76). The results were robust when tested in sensitivity analyses. Conclusion Specialized surveillance was a cost-effective strategy for the management of individuals at high risk of melanoma. There were also fewer invasive procedures in specialized surveillance compared with standard care in the community.