Aims To evaluate costs between a rate and rhythm control strategy in persistent atrial fibrillation. Methods and results In a prospective substudy of RACE (Rate control versus electrical cardioversion for persistent atrial fibrillation) in 428 of the total 522 patients (206 rate control and 222 rhythm control), a cost-minimisation and cost-effectiveness analysis was performed to assess cost-effectiveness of the treatment strategies. After a mean follow-up of 2.3+/-0.6 years, the primary endpoint (cardiovascular morbidity and mortality) occurred in 17.5% (36/202) of the rate control patients and in 21.2% (47/222) of the rhythm control patients. Mean costs per patient under rate control were euro 7386 and euro 8284 under rhythm control. Cost-effectiveness analysis showed that per avoided endpoint under rate control, the cost savings were euro 24944. Under rhythm control, more costs were generated due to electrical cardioversions, hospital admissions and anti-arrhythmic medication. Costs were higher in older patients, patients with underlying heart disease, those who reached a primary endpoint and women. Heart rhythm at the end of study, did not influence costs. Conclusions Rate control is more cost-effective than rhythm control for treatment of persistent atrial fibrillation. Underlying heart disease but not heart rhythm largely accounts for costs. Copyright 2004 Elsevier Ltd