To assess the cost effectiveness of larval therapy compared with hydrogel in the management of leg ulcers.Cost effectiveness and cost utility analyses carried out alongside a pragmatic multicentre, randomised, open trial with equal randomisation. Population Intention to treat population comprising 267 patients with a venous or mixed venous and arterial ulcers with at least 25% coverage of slough or necrotic tissue.Patients were randomly allocated to debridement with bagged larvae, loose larvae, or hydrogel.The time horizon was 12 months and costs were estimated from the UK National Health Service perspective. Cost effectiveness outcomes are expressed in terms of incremental costs per ulcer-free day (cost effectiveness analysis) and incremental costs per quality adjusted life years (cost utility analysis).The larvae arms were pooled for the main analysis. Treatment with larval therapy cost, on average, pound96.70 (euro109.61; $140.57) more per participant per year (95% confidence interval - pound491.9 to pound685.8) than treatment with hydrogel. Participants treated with larval therapy healed, on average, 2.42 days before those in the hydrogel arm (95% confidence interval -0.95 to 31.91 days) and had a slightly better health related quality of life, as the annual difference in QALYs was 0.011 (95% confidence interval -0.067 to 0.071). However, none of these differences was statistically significant. The incremental cost effectiveness ratio for the base case analysis was estimated at pound8826 per QALY gained and pound40 per ulcer-free day. Considerable uncertainty surrounds the outcome estimates.Debridement of sloughy or necrotic leg ulcers with larval therapy is likely to produce similar health benefits and have similar costs to treatment with hydrogel.Current Controlled Trials ISRCTN55114812 and National Research Register N0484123692.