This study was intended to evaluate the cost-effectiveness of anticoagulation clinic care and self-testing for the management of patients on chronic warfarin therapy. Using a 5-year Markov model, we evaluated the health and economic outcomes associated with each of three different anticoagulation management approaches: (1) usual care, (2) anticoagulation clinic testing with a capillary monitor, and (3) patient self-testing with a capillary monitor. Data available in the published literature and data from a large health system were used to develop model assumptions. Model results indicate that over a 5-year period, compared with usual care, anticoagulation clinic testing results in a total of 1.7 fewer thromboembolic events and 2.0 less hemorrhagic events per 100 patients. Another 4.0 thromboembolic events and 0.8 hemorrhagic events are avoided with patient self-testing compared with anticoagulation clinic testing. In addition to the health advantages of these strategies, both also have cost advantages. When the costs incurred by provider organizations and patients are considered, patient self-testing is the most cost-effective alternative, resulting in an overall cost saving.