ABSTRACT: The Lufwanyama Neonatal Survival Project ("LUNESP") was a cluster randomized, controlled trial that showed that training traditional birth attendants (TBAs) to perform interventions targeting birth asphyxia, hypothermia, and neonatal sepsis reduced all-cause neonatal mortality by 45%. This companion analysis was undertaken to analyze intervention costs and cost-effectiveness, and factors that might improve cost-effectiveness.We calculated LUNESP's financial and economic costs and the economic cost of implementation for a forecasted ten-year program (2011-2020). In each case, we calculated the incremental cost per death avoided and disability-adjusted life years (DALYs) averted in real 2011 US dollars. The forecasted 10-year program analysis included a base case as well as 'conservative' and 'optimistic' scenarios. Uncertainty was characterized using one-way sensitivity analyses and a multivariate probabilistic sensitivity analysis. The estimated financial and economic costs of LUNESP were $118,574 and $127,756, respectively, or $49,469 and $53,550 per year. Fixed costs accounted for nearly 90% of total costs. For the 10-year program, discounted total and annual program costs were $256,455 and $26,834 respectively; for the base case, optimistic, and conservative scenarios, the estimated cost per death avoided was $1,866, $591, and $3,024, and cost per DALY averted was $74, $24, and $120, respectively. Outcomes were robust to variations in local costs, but sensitive to variations in intervention effect size, number of births attended by TBAs, and the extent of foreign consultants' participation.Based on established guidelines, the strategy of using trained TBAs to reduce neonatal mortality was 'highly cost effective'. We strongly recommend consideration of this approach for other remote rural populations with limited access to health care.