Abstract Clinical trials have indicated that treating mosquito nets with insecticide could be a potentially cost-effective method of preventing malaria. As malaria is one of the most common causes of death in children under five in developing countries, there has been substantial interest in whether such findings can be replicated for a country's control programme in practice. The cost-effectiveness of the Gambian National Insecticide-impregnated Bednet Programme (NIBP), from the viewpoint of providers (government and non-governmental agencies) and the community, has been calculated. Information was collected from existing records, interviews with NIBP personnel, observation and household surveys. Information is provided on the resource use consequences of the NIBP in terms of reduced expenditure on anti-malaria preventive measures, treatment in government health services, household financed treatment and “charity” (burial, funeral and mourning activities), as well as cash income lost as a result of child death. The annual implementation cost of the NIBP was D757 875 (US$91 864), of which 86% was recurrent cost. The estimated number of deaths averted was 40.56. The net implementation cost-effectiveness ratio per death averted and discounted life years gained were D3884 (US$471) and D260 (US$31.5), respectively. Adding the cost of all mosquito nets would increase the cost-effectiveness ratios by over five times, which is an important consideration for countries with a lower coverage of mosquito nets per capita. It is concluded that insecticide-impregnated mosquito nets are one of the more efficient ways of reducing deaths in children under 10 years in rural Gambia.