OBJECTIVE: To report an economic analysis of the Australian intrapartum fetal pulse oximetry (FPO) multicentre randomised controlled trial (the FOREMOST trial), which examined whether adding FPO to conventional cardiotocographic (CTG) monitoring (intervention group) was cost-effective in reducing operative delivery rates for non-reassuring fetal status compared with the use of CTG alone (control group). DESIGN: Cost-effectiveness analysis of the FOREMOST trial. SETTING: Four Australian maternity hospitals, each with more than 4000 births/year. POPULATION: Women in labour at > or =36 weeks of gestation, with a non-reassuring CTG. METHODS: Costs were for treatment-related expenses, incorporating diagnosis-related grouping costs and direct costs (including fetal monitoring). Incremental cost-effectiveness ratio (ICER) and cost-effectiveness plane were calculated, and sensitivity analysis was conducted. The primary outcome was that of the clinical trial: operative delivery for non-reassuring fetal status avoided in the intervention group relative to that in the control group. MAIN OUTCOME MEASURES: The ICER. RESULTS: The ICER demonstrated a saving of $A813 for each operative birth for non-reassuring fetal status averted by the addition of FPO to CTG monitoring compared with the use of CTG monitoring alone. CONCLUSION: The addition of FPO to CTG monitoring represented a less costly and more effective use of resources to reduce operative delivery rates for non-reassuring fetal status than the use of conventional CTG monitoring alone.