In New South Wales, Australia, a cost-effectiveness evaluation was conducted of an adult drug court (ADC) program as an alternative to jail for criminal offenders addicted to illicit drugs. This article describes the program, the cost-effectiveness analysis, and the results. The results of this study reveal that, for the 23-month period of the evaluation, the ADC was as cost-effective as were conventional sanctions in delaying the time to the first offense and more cost-effective in reducing the frequency of offending for those outcome measures selected. Although the evaluation was conducted using the traditional steps of a cost-effectiveness analysis, because of the complexity of the program and data limitations it was not always possible to adhere to textbook procedures. As such, each step involved in undertaking the cost-effectiveness analysis is discussed, highlighting the key issues faced in the evaluation.