Aims To evaluate costs between a rate and rhythm control strategy in persistent atrial fibrillation. Methods and results In a prospective substudy of RACE (Rate control versus electrical cardioversion for persistent atrial fibrillation) in 428 of the total 522 patients (206 rate control and 222 rhythm control), a cost-minimisation and cost-effectiveness analysis was performed to assess cost-effectiveness of the treatment strategies. After a mean follow-up of 2.3±0.6 years, the primary endpoint (cardiovascular morbidity and mortality) occurred in 17.5% (36/202) of the rate control patients and in 21.2% (47/222) of the rhythm control patients. Mean costs per patient under rate control were € 7386 and € 8284 under rhythm control. Cost-effectiveness analysis showed that per avoided endpoint under rate control, the cost savings were € 24944. Under rhythm control, more costs were generated due to electrical cardioversions, hospital admissions and anti-arrhythmic medication. Costs were higher in older patients, patients with underlying heart disease, those who reached a primary endpoint and women. Heart rhythm at the end of study, did not influence costs. Conclusions Rate control is more cost-effective than rhythm control for treatment of persistent atrial fibrillation. Underlying heart disease but not heart rhythm largely accounts for costs.