Background: Health departments require an efficient strategy to investigate individuals exposed to Mycobacterium tuberculosis. The contact priority model (CPM) uses a decision rule to minimize testing of low-risk contacts; however, its impact on costs and disease control is unknown. Methods: A cost-effectiveness analysis compared the CPM with the traditional concentric circle approach (CCA) in a simulated population of 1000 healthy, community-dwelling adults with a 10% background rate of latent tuberculosis (TB) infection. The analysis was conducted from the perspective of the Alabama Department of Public Health. Model inputs were derived from the literature and the Alabama Department of Public Health. Lifetime costs (2004 dollars) and outcomes were discounted 3 percent annually. Incremental cost-effectiveness ratios were used to compare the strategies. Results: Over the lifetime of 1000 simulated contacts, the CPM saved $45 000 but led to 0.5 additional TB cases and 0.24 fewer years of life. The CCA is more effective than the CPM, but it costs $92 934 to prevent one additional TB case and $185 920 to gain one additional life year. Conclusions: The CPM reduces costs with minimal loss of disease control and is a viable alternative to the CCA under most conditions. © 2009 Lippincott Williams & Wilkins, Inc.