The cost-effectiveness of home monitoring of blood glucose (HMBG) in Type-2 diabetes in a developing country was evaluated. A total of 64 uncomplicated Type-2 diabetic individuals of higher middle class to rich socio-economic status were studied. Thirty-two were allocated to conventional monthly hospital visits group-I (Gr-I) and 32 to HMBG with hospital visits at 3 monthly intervals group-II (Gr-II). In Gr-I, compared to baseline, HbA1c values decreased by 0.76% (95% CI 0.11-1.42) after 9 months and by 0.95% (95% CI 0.12-1.77) after 15 months but lost significance after 18 months follow-up. On the other hand, in Gr-II patients, HbA1c decreased significantly from baseline from 3 months and remained so at 18 months when it was decreased by 1.37% (95% CI 0.25-2.49). Hypoglycaemic episodes per patient year follow-up were significantly lower among Gr-II patients (0.172 vs. 0.354, P = 0.03). Considering the cost for conveyance, wage loss, investigation, institutional cost, glucometer and test strips, the total cost per patient was quite similar in both groups. The present study suggests that HMBG with proper diabetes education may be cost-effective at least in selected groups of individuals with Type-2 diabetes, even in a developing country such as Bangladesh.