The objective of the study was to ascertain costs and outcomes of total joint replacement surgery for rheumatoid arthritis (RA) in Australia from the patients' perspective and to explore whether costs were affected by health status pre- or postsurgery. RA patients, scheduled for primary unilateral total knee replacement (TKR) or total hip replacement (THR) surgery at five Sydney hospitals, were approached. Preoperatively, patients retrospectively recorded expenses incurred over the previous 3 months and the health assessment questionnaire (HAQ). Postoperatively, patients completed detailed prospective cost diaries, short form (SF) 36, and HAQ every 3 months during the first postoperative year. In addition, patients were asked to complete a visual analogue measure for pain at 12 months postsurgery. Arthritis-specific cost information included prescription and nonprescription medication, visits to health professionals, tests, special equipment, alterations to the house, and use of private or community services. Thirty-one TKR and 11 THR patients provided cost data for the first postoperative year. Out-of-pocket costs and service utilization decreased over the first postoperative year for both TKR and THR patients. In addition, there was an improvement in the health status as measured by SF-36 but not the HAQ at 3 and 12 months postoperatively. The small sample size of this analysis is reflective of the current national trends of RA joint replacement surgery. Despite the low incidence of RA joint replacement surgery, it was substantiated that patients consider the positive impact on health outcomes and costs important. The generic SF-36 detected improvements in the health status of these RA patients, while total HAQ scores failed to do so. HAQ was found to be insensitive in reflecting improvements following lower limb replacement surgery. Patient out-of-pocket costs significantly decreased postoperatively; however, these costs remain substantial compared to osteoarthritis total joint replacement patients.