Cost‐effectiveness calculations of prostate cancer early detection havenot been possible due to the lack of any data demonstrating reduction inmortality from any test or procedure. Prior analyses focused only on costassessments without consideration of any possible benefits. We used currentdata from three consecutive years of the American Cancer Society‐National Prostate Cancer Detection Project to assess different economic perspectivesof test performance, marginal costs, and benefit‐cost analysis. Themarginal cost, or cost per cancer, of digital rectal examination (DRE)markedly increased by the third year relative to several proposedprostate‐specific antigen (PSA) scenarios. Sensitivity analysis for averagecost showed that at 4 ng/ml, pricing PSA below $30 would be the most potentfactor in potentially lowering costs. Analysis of receiver operatorcharacteristic curves suggested that optimal performance for PSA may be at3 ng/ml when combined with DRE or between 2 to 3 ng/ml when used alone. Benefit‐cost calculations demonstrated that DRE when performed by highlyskilled examiners had the lowest cost. However, DRE became one of the mostcostly detection scenarios when a minor decrease in performance wasassumed. Sensitivity analysis demonstrated that the three most determinantparameters of net benefit, in decreasing order, are: specificity, benefitsfrom earlier therapy, and prevalence. If a slightly more specific PSA assayis developed, the higher prevalence of clinically detectable prostatecancer could also make screening less costly than breast cancer screening. Under the assumptions of these analyses, the combination of PSA and DREappears to represent an ethical and economical detection choice forindividual patients in consultation with their physicians. Additionalresearch is needed to quantify the significance of differences betweendifferent screening strategies.