To determine whether polymerase chain reaction (PCR) testing in the initial diagnosis of pulmonary tuberculosis (TB) is cost-effective in a low-prevalence population, an economic evaluation was carried out between the smear and culture (NOPCR) and smear, culture and PCR (+PCR) strategies. A decision tree model based on retrospective laboratory data was developed to assess the strategies of testing patients with suspicion of TB. Direct healthcare costs prior to confirmation of TB or nontuberculous mycobacteria by PCR or culture were included. Effectiveness was measured by the probability of correct treatment and isolation decisions. In the baseline situation NOPCR costs Euro 29.50 less than the +PCR strategy per patient tested. According to sensitivity analyses, reducing PCR test price, shortening test performance time or increasing the proportion of smear-positive patients in the tested population would contribute to cost savings with the +PCR strategy. Routine polymerase chain reaction testing of all specimens from suspected tuberculosis patients in a low-prevalence population was not cost-saving. When the polymerase chain reaction assay was applied only to smear-positive sputum specimens, the smear and culture strategy was clearly dominated by it, i.e. the polymerase chain reaction smear-positive sputum strategy was less costly and more effective in producing correct treatment decisions and isolations.