Abstract Background The number of residents in long-term care facilities (LTCFs) in need of palliative care is growing in the Western world. Therefore, it is foreseen that significantly higher percentages of budgets will be spent on palliative care. However, cost-effectiveness analyses of palliative care interventions in these settings are lacking. Therefore, the objective of this paper was to assess the cost-effectiveness of the ‘PACE Steps to Success’ intervention. PACE (Palliative Care for Older People) is a 1-year palliative care programme aiming at integrating general palliative care into day-to-day routines in LTCFs, throughout seven EU countries. Methods A cluster RCT was conducted. LTCFs were randomly assigned to intervention or usual care. LTCFs reported deaths of residents, about whom questionnaires were filled in retrospectively about resource use and quality of the last month of life. A health care perspective was adopted. Direct medical costs, QALYs based on the EQ-5D-5L and costs per quality increase measured with the QOD-LTC were outcome measures. Results Although outcomes on the EQ-5D-5L remained the same, a significant increase on the QOD-LTC (3.19 points, p value 0.00) and significant cost-savings were achieved in the intervention group (€983.28, p value 0.020). The cost reduction mainly resulted from decreased hospitalization-related costs (€919.51, p value 0.018). Conclusions Costs decreased and QoL was retained due to the PACE Steps to Success intervention. Significant cost savings and improvement in quality of end of life (care) as measured with the QOD-LTC were achieved. A clinically relevant difference of almost 3 nights shorter hospitalizations in favour of the intervention group was found. This indicates that timely palliative care in the LTCF setting can prevent lengthy hospitalizations while retaining QoL. In line with earlier findings, we conclude that integrating general palliative care into daily routine in LTCFs can be cost-effective. Trial registration ISRCTN14741671.