Drug-resistant tuberculosis (TB) is a serious emerging problem in many low-resource countries. TB control programmes are uncertain of which drug susceptibility tests (DSTs) to use and when to test patients. We predicted the potential cost-effectiveness of different DST strategies, in settings with varying prevalence of drug resistance.Using decision analysis, we assessed the cost-effectiveness of conventional and rapid DSTs for previously diagnosed smear-positive TB cases. Five different time-points were considered for administering DSTs. Different initial drug resistance and HIV scenarios were also considered.All DST scenarios in the wide range of settings considered were found to be cost-effective. The strategy of performing a rapid DST that detects any form of isoniazid (INH) and rifampicin (RIF) resistance for all patients before the initiation of treatment was predicted to be the most cost-effective strategy. In a setting with moderate drug resistance, the cost per disability-adjusted life year gained was as low as US$744.Our findings support the roll-out of rapid drug susceptibility testing at the moment of diagnosis to detect any form of INH and RIF resistance in all countries with moderate or greater burdens of drug-resistant TB.