In order to clarify the feasibility of laparoscopically assisted vaginal hysterectomy (LAVH) using a not-for-extra charge instrument and to determine its cost-effectiveness in the Taiwan national health care system, we designed a prospective comparison which recruited candidates with nonmalignant uterine tumors prepared for hysterectomy to assess treatment by the laparoscopic versus the laparotomic approach. There were 144 patients in the laparoscopic group and 157 patients in the laparotomic group. The two groups were similar in characteristics. A total of 138 LAVHs were completed with six conversions (4.2%) to abdominal hysterectomy. Intraoperatively, the mean operating time in the LAVH group was longer than in the laparotomic group (134 vs 112 minutes, p < 0.001). No statistically significant differences were found between the two groups in mean estimated blood loss (260 vs 259 mL) and complications (5.8 vs 4.5%). Postoperatively, mean flatulence-relief time (27.4 vs 31.3 hours) and intramuscular meperidine requirements (1.6 vs 2.5 ampoules, 1 ampoule = 50 mg) were significantly less with LAVH. There were no differences in mean hemoglobin levels (10.7 vs 10.9 g/dL), complications (9.4 vs 13.4%, p = 0.288), or hospital stay (4.9 vs 5.2 days, p = 0.058). The mean total hospital charges (NT$48,390 vs 41,649) and insurance-paid costs (NT$43,992 vs 38,389) were significantly greater in the LAVH group. In conclusion, LAVH when performed by an experienced laparoscopist and for adequately selected patients, permits a better short-term convalescence, but is more expensive compared with conventional abdominal hysterectomy.