Background: Cellulitis is a common and often recurrent infection that causes substantial financial burden and morbidity. Compression therapy reduces the risk of recurrent cellulitis episodes for adults with chronic edema; however, little is known about the cost-effectiveness of the intervention. Methods and Results: A cost analysis was undertaken during a randomized controlled trial (RCT) involving 84 participants with lower limb chronic edema and a history of recurrent cellulitis. The intervention group received compression therapy and education, while the control group received education only. A clinical audit and survey were used to measure health service and patient resource use for (1) the most recent episode of cellulitis, and (2) compression therapy over 18 months. Australian reference costs were used to calculate cellulitis and compression therapy costs, and the mean expenditure in both the RCT groups. Of the 84 RCT participants, 43 were surveyed and audited on the cost of cellulitis, and 40 on the cost of compression therapy. The mean cost of a hospitalized and nonhospitalized episode of cellulitis was $9071 and $506 from a health service perspective, and $4496 and $1320 from a patient perspective. The mean cost of compression therapy per participant over 18 months was $1905 and $421 from health service and patient perspectives, respectively. During the RCT, the mean annual cost per participant was $4972 in the experimental group and $26,382 in the control group, giving a cost-saving of $21,483 (95% confidence interval, 3136-48,176) per participant. Conclusion: For patients with lower limb chronic edema and recurrent cellulitis, compression therapy is both efficacious and cost-saving. Trial Registration: ACTRN12617000412336.