Objective: This paper assesses the cost-effectiveness of a community dental caries prevention programme, targeting pre-school children living in non-fluoridated rural areas of Chile. Basic research design: The results of a community trial to measure the effects of using fluoridated powdered milk and milk-cereal to prevent dental caries, together with the cost of running the programmeme, were used to determine its cost-effectiveness when compared to the status-quo alternative. In the experimental community, fluoridated milk products were given to approximately 1,000 children aged between six months and six years, using the standard National Complementary Feeding Programme available in Chile. The control group received the milk products only. Dental caries status was recorded at the beginning and end of the programme in both communities using WHO criteria. The costs that would be incurred by such a programme, using a societal perspective, were identified and measured. Results: Children who received fluoridated products had significantly lower mean levels of dental caries than those who had not. This improvement was achieved with a yearly cost of RCH (1999) $1,839.75 per child (1 US$ = RCH (1999) $527.70). On average, this programme resulted in a net societal savings of RCH (1999) $2,695.61 per diseased tooth averted after four years when compared to the control group. Conclusions: While the analysis has inherent limitations as a result of its reliance on a range of assumptions, the findings suggest that there are important health and economic benefits to be gained from the use of fluoridated milk products in non-fluoridated rural communities in Chile. Key words: Chile, cost-effectiveness, dental caries, milk-fluoridation, prevention programme.