OBJECTIVES: To report if there is a difference in costs from a societal perspective between adults receiving rehabilitation in an inpatient rehabilitation setting versus an alternative setting. If there are cost differences, to report whether opting for the least expensive program setting adversely affects patient outcomes. DATA SOURCES: Electronic databases from the earliest possible date until May 2011. All languages were included. STUDY SELECTION: Multiple reviewers identified randomized controlled trials with a full economic evaluation that compared adult inpatient rehabilitation with an alternative. There were 29 included trials with 6746 participants. DATA EXTRACTION: Multiple observers extracted data independently. Trial appraisal included a risk of bias assessment and a checklist to report the strength of the economic evaluation. DATA SYNTHESIS: Results were synthesized using standardized mean differences (SMDs) and meta-analyses for the primary outcome of cost. The Grading of Recommendations Assessment, Development, and Evaluation was applied to assess for risk of bias across studies for meta-analyses. There was high-quality evidence that cost was significantly reduced for rehabilitation in the home versus inpatient rehabilitation in a meta-analysis of 732 patients poststroke (pooled SMD [δ]=-.28; 95% confidence interval [CI], -.47 to -.09), without compromise to patient outcomes. Results of individual trials in other patient groups (orthopedic, rheumatoid arthritis, and geriatric) receiving rehabilitation in the home or community were generally consistent with the meta-analysis. There was moderate quality evidence that cost was significantly reduced for inpatient rehabilitation (stroke unit) versus general acute care in a meta-analysis of 463 patients poststroke (δ=.31; 95% CI, .15-.48), with improvement to patient outcomes. These results were not replicated in 2 individual trials with a geriatric and a mixed cohort, where costs did not differ between general acute care and inpatient rehabilitation. Three of the 4 individual trials, inclusive of a stroke or orthopedic population, reported less cost for an intensive inpatient rehabilitation program compared with usual inpatient rehabilitation. Sensitivity analysis included a health service perspective and varied inflation rates with no change to the significant findings of the meta-analyses. CONCLUSIONS: Based on this systematic review and meta-analyses, a single rehabilitation service may not provide health economic benefits for all patient groups and situations. For some patients, inpatient rehabilitation may be the most cost-effective method of providing rehabilitation; yet, for other patients, rehabilitation in the home or community may be the most cost-effective model of care. To achieve cost-effective outcomes, the ideal combination of rehabilitation services and patient inclusion criteria, as well as further data for nonstroke populations, warrants further research.