OBJECTIVE: To evaluate and compare Mohs micrographic surgery and traditional excision in terms of cost and outcomes. DESIGN: We developed a computer-simulation, probabilistic, decision model to perform a cost-effectiveness analysis, with each patient serving as his or her own control. SETTING: University of Connecticut dermatology clinic, a tertiary care referral center. PARTICIPANTS: Input data were derived from results of a consecutive sample of 98 patients with nonmelanoma skin cancer on the face and ears, estimates in the literature on 5-year recurrence rates, and a query of healthy focus-group participants. INTERVENTION: We considered Mohs and traditional excision strategies. MAIN OUTCOME MEASURES: Outcomes were measured in quality-adjusted life years, cost, and cost-effectiveness. RESULTS: The Mohs strategy was $292 less expensive than the traditional surgical strategy and was more effective by an incremental quality-adjusted life year of 0.056 (translating to approximately 3 weeks of optimal quality of life). Results were robust to subgroup and sensitivity analyses. CONCLUSIONS: Mohs may be more cost-effective than traditional excision in eradicating nonmelanoma skin cancer. Further investigation of costs from various geographic payment localities and assessment of quality-of-life outcomes from a population-based sample are needed.