Evidence on the cost and cost-effectiveness of treatment of multidrug-resistant tuberculosis (MDR-TB) is limited, and no published data are available from former Soviet Union countries, where rates of MDR-TB are highest globally.We evaluated the cost and cost-effectiveness of MDR-TB treatment in Estonia and Russia (Tomsk Oblast), comparing cohorts enrolled on treatment according to World Health Organization (WHO) guidelines in 2001 and 2002 with cohorts treated in previous years. Costs were assessed from a health system perspective in 2003 US$; effects were measured as cures, deaths averted and disability-adjusted life-years (DALYs) averted.Cure rates when WHO guidelines were followed were 61% (90 out of 149) in Estonia and 76% (76 out of 100) in Tomsk Oblast, with a cost per patient treated of US$8,974 and US$10,088, respectively. Before WHO guidelines were followed, cure rates were 52% in Estonia and 15% in Tomsk Oblast; the cost per patient treated was US$4,729 and US$2,282, respectively. Drugs and hospitalisation accounted for 69–90% of total costs. The cost per DALY averted by treatment following WHO guidelines was US$579 (range US$297–US$902) in Estonia and US$429 (range US$302–US$546) in Tomsk Oblast.Treatment of patients with MDR-TB can be cost-effective, but requires substantial additional investment in tuberculosis control in priority countries.