Purpose There are limited data from developing countries on the role and cost-effectiveness of allogeneic stem cell transplantation (allo-SCT) for patients with acute myeloid leukemia (AML). Patients and Methods We undertook a retrospective descriptive study of all patients with AML who underwent allo-SCT from 1994 to 2013 at our center to evaluate the clinical outcomes and cost-effectiveness of this therapeutic modality. Results Two hundred fifty-four consecutive patients, median age 34 years, who underwent allo-SCT at our center were included in this study. There were 161 males (63.4%). The 5-year overall survival (OS) and event-free survival for the entire cohort was 40.1 ± 3.5% and 38.7 ± 3.4%, respectively. The 5-year OS for patients in first (CR1), second, and third complete remission and with disease/refractory AML was 53.1 ± 5.2%, 48.2 ± 8.3%, 31.2 ± 17.8%, and 16.0 ± 4.4%, respectively ( P < .001). From 2007, reduced intensity conditioning (RIC) with fludarabine and melphalan (Flu/Mel) was used in a majority of patients in CR1 (n = 67). Clinical outcomes were compared with historical conventional myeloablative conditioning regimens (n = 38). Use of Flu/Mel was associated with lower treatment-related mortality at 1 year, higher incidence of chronic graft-versus-host-disease, and comparable relapse rates. The 5-year OS and event-free survival for Flu/Mel and myeloablative conditioning group was 67.2 ± 6.6% versus 38.1 ± 8.1% ( P = .003) and 63.8 ± 6.4% versus 32.3 ± 7.9% ( P = .002), respectively. Preliminary cost analysis suggests that in our medical cost payment system, RIC allo-SCT in CR1 was likely the most cost-effective strategy in the management of AML. Conclusion In a resource-constrained environment, Flu/Mel RIC allo-SCT for AML CR1 is likely the most efficacious and cost-effective approach in a subset of newly diagnosed young adult patients.