ObjectivesTo conduct a health economic evaluation of a proposed investment in urban bicycle infrastructure in Stockholm County, Sweden.DesignA cost-effectiveness analysis is undertaken from a healthcare perspective. Investment costs over a 50-year life cycle are offset by averted healthcare costs and compared with estimated long-term impacts on morbidity, quantified in disability-adjusted life years (DALYs). The results are re-calculated under different assumptions to model the effects of uncertainty.SettingThe Municipality of Stockholm (population 2.27 million) committed funds for bicycle path infrastructure with the aim of achieving a 15% increase in the number of bicycle commuters by 2030. This work is based on a previously constructed scenario, in which individual registry data on home and work address and a transport model allocation to different modes of transport identified 111 487 individuals with the physical capacity to bicycle to work within 30 min but that currently drive a car to work.ResultsMorbidity impacts and healthcare costs attributed to increased physical activity, change in air pollution exposure and accident risk are quantified under the scenario. The largest reduction in healthcare costs is attributed to increased physical activity and the second largest to reduced air pollution exposure among the population of Greater Stockholm. The expected net benefit from the investment is 8.7% of the 2017 Stockholm County healthcare budget, and 3.7% after discounting. The economic evaluation estimates that the intervention is cost-effective and each DALY averted gives a surplus of €9933. The results remained robust under varied assumptions pertaining to reduced numbers of additional bicycle commuters.ConclusionInvesting in urban infrastructure to increase bicycling as active transport is cost-effective from a healthcare sector perspective.