BACKGROUND: Evidence on cost-effectiveness is important to make well-informed decisions regarding care delivery. AIMS: To determine the balance between costs and health outcomes of cognitive-behavioural therapy (CBT) compared with treatment as usual (TAU) in people with schizophrenia who have persistent and recurrent symptoms of psychosis. Trial number: ISRCTN57292778. METHOD: A total of 216 people were randomised and followed up for 18 months. The primary clinical outcome measure was time functioning within the normal range. Normal functioning was defined as social functioning within the 95% range of the general population and no or minimal suffering and/or no or minimal affect on daily life of persistent psychotic symptoms. The difference in number of days was estimated. Using a societal perspective, cost differences were estimated and combined with clinical outcome to yield an incremental cost-effectiveness ratio (ICER). Uncertainty was accessed using bootstrapping and displayed by means of a cost-effectiveness acceptability curve. RESULTS: In the CBT group, participants experienced 183 days of normal social functioning, whereas the TAU group experienced 106 days. The ICER was euro47 per day of normal functioning gained. Cognitive-behavioural therapy implies higher costs, yet results in better health outcomes. Sensitivity analyses showed that targeting individuals who have not been hospitalised before receiving CBT results in an ICER of euro14 per day normal functioning gained. CONCLUSIONS: Days of normal functioning improved in the CBT condition compared with TAU, but this gain in health was associated with additional societal costs