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BACKGROUND: Although methadone maintenance is effective in reducing injection drug use, needle sharing, and the overall mortality associated with opiate abuse, many health plans offer little or no access to methadone, and many methadone providers do not comply with treatment guidelines regarding dose, duration of treatment, or provision of ancillary services. Moral and political judgments have helped shape the U.S. treatment system. Evaluations of methadone cost-effectiveness may play a role in changing public policy. METHOD: Cost-effectiveness analysis is used to compare a change, or changes, in treatment to that of current standard care. The cost of treatment and its effect on outcomes are used to find the incremental cost-effectiveness ratio, and determine whether the change(s) should be adopted. The literature on methadone maintenance is reviewed from an economic perspective, focusing on five policy questions: (1) whether methadone should be a health care benefit; (2) what level of ancillary services is optimal; (3) what methadone dose is appropriate; (4) what length of treatment is appropriate; and (5) whether contingency contracts should be employed. RESULTS: Expanded access to methadone maintenance has an incremental cost-effectiveness ratio of less than $11,000 per Quality-Adjusted Life Year. This is more cost-effective than many widely used medical therapies, a finding that strongly supports the inclusion of methadone in the formulary of health care plans.Ancillary services have been shown to be an effective part of methadone maintenance therapy, especially during the beginning of a treatment episode, but there is not enough information available to tell whether the optimal amount of services is being used. There is extensive evidence that many treatment programs dispense inadequate doses of methadone. The cost of additional drugs is very small compared to the benefits of an adequate dose. Many methadone programs limit treatment to 6 months or less, but such short episodes are not likely to be cost-effective. The medical model of methadone maintenance may increase the cost-effectiveness of the treatment for long-term patients. Programs that reward patients for negative urinalysis have proven effective at reducing illicit drug use, but their cost-effectiveness will need to be demonstrated before they are widely adopted. CONCLUSIONS: Cost-effectiveness researchers need to measure substance abuse outcomes in terms of Quality-Adjusted Life Years, as this will make their findings more relevant to the development of treatment policy. It will allow different substance abuse treatments to be compared to each other and to medical care interventions.