The purpose of this study was to analyze the cost and cost-effectiveness of femoropopliteal PTA compared to femoropopliteal bypass surgery in chronic critical ischaemia of the lower limb. A total of 772 patients were treated either by femoropopliteal PTA or vascular reconstruction in two of the three largest vascular centers in Finland 1991-1992. A subset of 124 cases with chronic critical leg ischaemia, which according to a retrospective independent analysis by a vascular surgeon and a radiologist could have been treated with either modality, were included in the study. Eighty-six of those were treated with PTA and 38 with surgery. The patients were followed up for to three years after treatment. Clinical outcomes were measured as change in the ABI (ankle-brachial pressure index) and avoidance of reoperation and amputation. The hospital costs covering all events from preoperative examinations to the three-year follow-up visit were identified by using hospital discharge register and accounting data. Cost-effectiveness was calculated as cost per reoperation-free year and year of leg saved. Surgery cases were found to have a more severe disease as indicated by lower distal pressures and longer occlusions and they also showed a slightly better clinical outcome, although the differences were not statistically significant. PTA costs were half of those of vascular surgery. The cost-effectiveness rates were significantly better for the PTA patients. PTA is a feasible and cost-effective procedure in chronic critical ischaemia of the lower limb and should be the treatment of choice in the subset of patients where both procedures are possible.