Objective: Endoscopic surveillance of Barrett's esophagus is commonly practiced to detect malignancy in an early and curable stage. However, the cost-effectiveness of this practice has been questioned. To clarify this issue, we undertook a cost analysis of endoscopic surveillance to detect adenocarcinoma in Barrett's esophagus compared with mammography used to detect occult carcinoma of the breast, a widely accepted cancer surveillance technique. Methods: The rate of esophageal adenocarcinoma detected by endoscopic surveillance was calculated for Duluth Clinic patients with Barrett's esophagus seen from 1980 to 1995 and compared with published rates. The rate of occult breast cancer detection was calculated for all women undergoing surveillance mammography at the Duluth Clinic for the year 1994 and compared with published rates. Costs for screening studies and therapy for cancer treatment for both cancers were calculated based on clinical results and assumptions regarding outcomes derived from published reports, and the costs were compared. Results: Endoscopic surveillance of 149 patients with benign Barrett's esophagus was performed for a total of 510 patient-yr, during which time seven patients developed adenocarcinoma, an incidence of one case per 73 patient-yr of follow-up. Occult breast cancer was detected in 50 of 12,537 mammograms, a detection rate of 0.4%. The incidences in both cases were comparable to published figures. The costs of detecting a case of adenocarcinoma in Barrett's esophagus and occult breast cancer were $37,928 and $54,513, respectively, and those for treatment resulting in cure were $83,340 and $83,292. Cost per life-yr saved was $4,151 for adenocarcinoma in Barrett's esophagus and $57,926 for breast cancer. Conclusion: Endoscopic surveillance of patients with Barrett's esophagus compares favorably with the common practice of surveillance mammography to detect early breast cancer, and should therefore be considered to be as cost-effective as surveillance mammography.