Background: Recent reports have suggested that functional outcomes are similar following either amputation or reconstruction of a severely injured lower extremity. The goal of this study was to compare two-year direct health-care costs and projected lifetime health-care costs associated with these two treatment pathways. Methods: Two-year health-care costs were estimated for 545 patients with a unilateral limb-threatening lower-extremity injury treated at one of eight level-I trauma centers. Included in the calculation were costs related to (1) the initial hospitalization, (2) all rehospitalizations for acute care related to the limb injury, (3) inpatient rehabilitation, (4) outpatient doctor visits, (5) outpatient physical and occupational therapy, and (6) purchase and maintenance of prosthetic devices. All dollar figures were inflated to constant 2002 dollars with use of the medical service Consumer Price Index. To estimate projected lifetime costs, the number of expected life years was multiplied by an estimate of future annual health-care costs and added to an estimate of future costs associated with the purchase and maintenance of prosthetic devices. Results: When costs associated with rehospitalizations and post-acute care were added to the cost of the initial hospitalization, the two-year costs for reconstruction and amputation were similar. When prosthesis-related costs were added, there was a substantial difference between the two groups ($81,316 for patients treated with reconstruction and $91,106 for patients treated with amputation). The projected lifetime health-care cost for the patients who had undergone amputation was three times higher than that for those treated with reconstruction ($509,275 and $163,282, respectively). Conclusions: These estimates add support to previous conclusions that efforts to improve the rate of successful reconstructions have merit. Not only is reconstruction a reasonable goal at an experienced level-I trauma center, it results in lower lifetime costs. Level of Evidence: Economic and decision analysis, Level II. See Instructions to Authors for a complete description of levels of evidence.