Abstract Background The aim was to determine the cost-effectiveness of radioguided occult lesion localization using 125I-labelled seeds (125I seeds) versus hookwire localization in terms of incremental cost per reoperation avoided for women with non-palpable breast cancer undergoing breast-conserving surgery. Methods This study was based on a multicentre RCT with eight study sites comprising seven public hospitals and one private hospital. An Australian public health system perspective was taken. The primary effectiveness outcome for this study was reoperations avoided. Cost-effectiveness was expressed as an incremental cost-effectiveness ratio (ICER). One-way and probabilistic sensitivity analyses were used to explore uncertainty. The willingness to pay (additional cost of localization using 125I seeds justified by reoperation cost avoided) was set at the weighted, top-down cost of reoperation. Costs were in 2019 Australian dollars ($1 was equivalent to €0.62). Results The reoperation rate was 13.9 (95 per cent confidence interval 10.7 to 18.0) per cent for the 125I seed group and 18.9 (14.8 to 23.8) per cent for the hookwire localization group. The ICER for 125I seed versus hookwire localization was $4474 per reoperation averted. The results were most sensitive to uncertainty around the probability of reoperation. Accounting for transition probability and cost uncertainty for 125I seed localization, there was a 77 per cent probability that using 125I seeds would be cost-effective, with a willingness to pay of $7693 per reoperation averted. Conclusion Radioguided occult lesion localization using 125I seeds is likely to be cost-effective, because the marginal (additional) cost compared with hookwire localization is less than the cost of reoperations avoided.