Introduction There is little cost-effectiveness evidence for obesity prevention interventions targeted at pre-school children but this is essential for policy makers to assess whether the benefits of an intervention represent good value for money. The Healthy Beginnings Trial (HBT) has already been shown to be effective at reducing BMI among children aged 2 years¹; we therefore conducted a retrospective economic evaluation of the intervention. Methods Participants were 465 first time mothers and children from economically disadvantaged areas of Sydney, Australia from 2007-2010. Using standard economic evaluation techniques we investigated the costs and cost-effectiveness of HBT compared to usual care from a health care provider perspective and using linked patient-level data on healthcare resource utilisation. Incremental cost-effectiveness ratios (ICERs) were determined per unit reduction in BMI and per 0.1 unit change in BMI z-score at 2 years. Results The costs of HBT intervention over 2 years was $1309 per child; $985 in the first year of life and $324 in the second. Mean costs to the health system of other health services to age 2 years were $2706 (intervention) and $2582 (control), difference $125 (p=0.68). The incremental cost-effectiveness ratio (ICER) of an improvement in BMI of 1 unit was $4230. The ICER per 0.1 unit change in BMI z-score was $610. Sensitivity analysis of key parameters under a scaled up mode of intervention delivery, suggest that reducing the cost of the intervention is highly plausible. Conclusions The study has established the costs and cost-effectiveness of delivering an effective weight management programme in the first two years of life. Whilst the intervention may be perceived as being expensive, it is more cost-effective than some similarly priced interventions aimed at older children. In addition, the health benefits of a preventive intervention such as this are likely to continue to accrue into the future.