Background: With 249,007 new leprosy patients detected globally in 2008, it remains necessary to develop new and effective interventions to interrupt the transmission of M. leprae. We assessed the economic benefits of single dose rifampicin (SDR) for contacts as chemoprophylactic intervention in the control of leprosy. Methods: We conducted a single centre, double blind, cluster randomised, placebo controlled trial in northwest Bangladesh between 2002 and 2007, including 21,711 close contacts of 1,037 patients with newly diagnosed leprosy. We gave a single dose of rifampicin or placebo to close contacts, with follow-up for four years. The main outcome measure was the development of clinical leprosy. We assessed the cost effectiveness by calculating the incremental cost effectiveness ratio (ICER) between the standard multidrug therapy (MDT) program with the additional chemoprophylaxis intervention versus the standard MDT program only. The ICER was expressed in US dollars per prevented leprosy case. Findings: Chemoprophylaxis with SDR for preventing leprosy among contacts of leprosy patients is cost-effective at all contact levels and thereby a cost-effective prevention strategy. In total, $6,009 incremental cost was invested and 38 incremental leprosy cases were prevented, resulting in an ICER of $158 per one additional prevented leprosy case. It was the most cost-effective in neighbours of neighbours and social contacts (ICER $214), slightly less cost-effective in next door neighbours (ICER $497) and least cost-effective among household contacts (ICER $856). Conclusion: Chemoprophylaxis with single dose rifampicin given to contacts of newly diagnosed leprosy patients is a cost-effective intervention strategy. Implementation studies are necessary to establish whether this intervention is acceptable and feasible in other leprosy endemic areas of the world.