OBJECTIVE: To determine the net benefit and costs associated with gown use in preventing transmission of vancomycin-resistant Enterococcus (VRE). DESIGN: A cost-benefit analysis measuring the net benefit of gowns was performed. Benefits, defined as averted costs from reduced VRE colonization and infection, were estimated using a matched cohort study. Data sources included a step-down cost allocation system, hospital informatics, and microbiology databases. SETTING: The medical intensive care unit (MICU) at Barnes-Jewish Hospital, St. Louis, Missouri. PATIENTS: Patients admitted to the MICU for more than 24 hours from July 1, 1997, to December 31, 1999. INTERVENTIONS: Alternating periods when all healthcare workers and visitors were required to wear gowns and gloves versus gloves alone on entry to the rooms of patients colonized or infected with VRE. RESULTS: On base-case analysis, 58 VRE cases were averted with gown use during 18 months. The annual net benefit of the gown policy was $419,346 and the cost per case averted of VRE was $1,897. The analysis was most sensitive to the level of VRE transmission. CONCLUSIONS: Infection control policies (eg, gown use) initially increase the cost of health services delivery. However, such policies can be cost saving by averting nosocomial infections and the associated costs of treatment the cost savings to the hospital plus the benefits to patients and their families of avoiding nosocomial infections make effective infection control policies a good investment.