To quantify the incremental costs and outcomes of using long-term adjuvant goserelin in addition to radiotherapy for locally advanced prostate cancer. The cost of radiotherapy for prostate cancer has been calculated using an activity-costing model. The total cost of administering adjuvant hormonal therapy for 3 years is based on local pharmacy charges plus typical physician billing fees and additional laboratory costs. Outcome data were obtained from the published EORTC 22,863 randomized trial comparing treatment of locally advanced prostate cancer with radiotherapy alone or in combination with 3 years of adjuvant goserelin. Using this information, the cost-effectiveness of adjuvant goserelin was calculated and expressed in terms of dollars per life-years (LY) gained. The total institutional costs of radiotherapy are $9000 Cdn. and the additional costs of providing adjuvant goserelin for 3 years are approximately $19,800 CDN. The improvement in outcome with the use of adjuvant goserelin was estimated to be 1.2 LY per patient treated, giving a cost-effectiveness ratio of $16,500 Cdn ($11,000 US) per LY from an institutional perspective. Our sensitivity analysis confirms the robustness of our findings since even in our "worst case" scenario the cost-effectiveness ratio was estimated to be $21,600 Can ($14,400 US) per LY gained. This figure is still below $50,000 US per LY gained which is the quoted current standard for cost-effectiveness. This analysis demonstrates that the use of long-term adjuvant goserelin for locally advanced prostate cancer provides substantial benefit at an acceptable cost.