BACKGROUND: The decision whether to treat conservatively or reconstruct surgically a torn anterior cruciate ligament (ACL) is an ongoing subject of debate. The high prevalence and associated public health burden of torn ACL has led to continuous efforts to determine the best therapeutic approach. A critical evaluation of benefits and expenditures of both treatment options as in a cost effectiveness analysis seems well-suited to provide valuable information for treating physicians and healthcare policymakers. METHODS: A literature review identified four of 7410 searched articles providing sufficient outcome probabilities for the two treatment options for modeling. A transformation key based on the expert opinions of 25 orthopedic surgeons was used to derive utilities from available evidence. The cost data for both treatment strategies were based on average figures compiled by Orthopaedic University Hospital Balgrist and reinforced by Swiss national statistics. A decision tree was constructed to derive the cost-effectiveness of each strategy, which was then tested for robustness using Monte Carlo simulation. RESULTS: Decision tree analysis revealed a cost effectiveness of 16,038 USD/0.78 QALY for ACL reconstruction and 15,466 USD/0.66 QALY for conservative treatment, implying an incremental cost effectiveness of 4,890 USD/QALY for ACL reconstruction. Sensitivity analysis of utilities did not change the trend. CONCLUSION: ACL reconstruction for reestablishment of knee stability seems cost effective in the Swiss setting based on currently available evidence. This, however, should be reinforced with randomized controlled trials comparing the two treatment strategies.