Until January 1989, mumps vaccine was not routinely administered in Israel, and rubella immunization was restricted to adolescent girls. The theoretical effect of combined mumps-rubella vaccination was applied to a population consisting of a cohort of 1-year-old children followed for 13 years. Assuming 90% compliance and 95% vaccine efficacy, projected clinical cases of mumps, rubella, encephalitis and thrombocytopenia would be reduced by 4,144; 3,109; 13; and 1 respectively. We anticipate a benefit to cost ratio of between 1.17 and 1.77 for the program. Since only 10-20% of cases are reported, the true benefit to cost ratio is likely to be at least 5.85. The benefit to cost ratio based on health service benefits alone is between 0.34 and 0.52; however, after adjusting for under-reporting, benefits are expected to exceed costs. Expenditures for laboratory testing, a factor not previously considered in such an analysis, would be reduced by approximately $2,750 per year. These results justify the initiation in January 1989 of nationwide routine vaccination.