Background The recommendation of the Sixth Report of the Joint National Committee on Prevention, Detection, Evaluation, and Treatment of High Blood Pressure (JNC VI) to lower blood pressure (BP) in diabetic patients to less than 130/85 mm Hg may have negative economic consequences. A formal cost-effectiveness analysis was therefore performed, comparing the costs and potential benefits of a BP goal of less than 140/90 mm Hg (as recommended by JNC V) vs less than 130/85 mm Hg (as in JNC VI). Methods A 24-cell computer model was populated with costs (1996 dollars), relative risks, and age-specific baseline rates for death and 4 nonfatal adverse events (stroke, myocardial infarction, heart failure, and end-stage renal disease), derived from published data. Costs and benefits were discounted at 3%. Results For 60-year-old diabetic persons with hypertension, treating to the lower BP goal increases life expectancy by 0.48 (discounted) years and lowers (discounted) lifetime medical costs by $1450 compared with treating BP to less than 140/90 mm Hg. The lower treatment BP goal results in an overall cost savings over a wide range of initial conditions, and for nearly all analyses for patients older than 60 years. Conclusions Any incremental treatment for 60-year-olds that costs less than $414 annually and successfully lowers BP from below 140/90 to below 130/85 mm Hg would be cost saving in the long term, due to the reduction in attendant costs of future morbidity. The lower treatment goal recommended for high-risk hypertensive patients compares favorably in cost-effectiveness with many other frequently recommended treatment strategies, and saves money overall for patients aged 60 years and older.