Background: Minnesota was the first state in the USA to implement a large state funded tobacco control programme ( in 1985). Despite evidence of effectiveness, it was dismantled in 1993. Objective: To describe and analyse how and why these events transpired and identify lessons for tobacco control advocates facing similar challenges in the 21st century. Design: Case study based on previously secret tobacco industry documents, news reports, research reports, official documents, and interviews with health advocates and state government officials. Results: Unable to defeat funding for this campaign in 1985, the tobacco industry organised groups which eliminated it later. Despite the programme's documented effectiveness, it was dismantled based on claims of fiscal crisis. These claims were not true; the real debate was what to do with the state's surplus. Health advocates failed to challenge the claim of fiscal crisis or mobilise public support for the programme. Conclusions: Simply quoting evidence that a tobacco control programme is effective does not ensure its continuing survival. Claims of fiscal crisis are an effective cover for tobacco industry efforts to dismantle successful programmes, particularly if health advocates accept these claims and fail to mobilise political pressure to defend the programme.