In New South Wales (NSW), Australia, new legislation, the Drug Court Act 1998, was enacted to enable a trial to be conducted of an adult drug court program as an alternative to jail for the increasing number of criminal offenders who were addicted to elicit drugs. One of the questions the trial was established to address was whether the adult drug court is more cost effective at achieving reduced recidivism (i.e. re offending) among drug dependent criminal offenders than the conventional judicial and corrections system. This paper discusses the objectives, methods and results of the cost-effectiveness analysis conducted for the NSW Bureau of Crime Statistics and Research.