Cost-effectiveness analysis (CEA) is a method for choosing between alternative strategies to achieve a specified outcome in an environment of limited resources. This paper discusses the use of CEA in evaluating prevention strategies in industrial settings, using cumulative trauma disorder (CTD) prevention programs as an example. Methodologic issues in designing studies of cost-effectiveness for preventive interventions are discussed. A decision analysis model of a CTD prevention program is described as a means of studying the program's cost-effectiveness. The relationship between CEA and outcomes research, and the strengths and limitations of CEA in evaluating occupational health prevention programs is considered.