Background: Competitive athletes value the ability to return to competitive play after the treatment of anterior cruciate ligament (ACL) injuries. ACL reconstruction has high success rates for return to play, but some studies indicate that patients may do well with nonoperative physical therapy treatment. Purpose: To evaluate the cost-effectiveness of the treatment of acute ACL tears with either initial surgical reconstruction or physical therapy in competitive athletes. Study Design: Economic and decision analysis; Level of evidence, 2. Methods: The incremental cost, incremental effectiveness, and incremental cost-effectiveness ratio (ICER) of ACL reconstruction compared with physical therapy were calculated from a cost-effectiveness analysis of ACL reconstruction compared with physical therapy for the initial management of acute ACL injuries in competitive athletes. The ACL reconstruction strategy and the physical therapy strategy were represented as Markov models. Costs and quality-adjusted life-years (QALYs) were evaluated over a 6-year time horizon and were analyzed from a societal perspective. Quality of life and probabilities of clinical outcomes were obtained from the peer-reviewed literature, and costs were compiled from a large academic hospital in the United States. One-way, 2-way, and probabilistic sensitivity analyses were used to assess the effect of uncertainty in variables on the ICER of ACL reconstruction. Results: The ICER of ACL reconstruction compared with physical therapy was $22,702 per QALY gained. The ICER was most sensitive to the quality of life of returning to play or not returning to play, costs, and duration of follow-up but relatively insensitive to the rates and costs of complications, probabilities of return to play for both operative and nonoperative treatments, and discount rate. Conclusion: ACL reconstruction is a cost-effective strategy for competitive athletes with an ACL injury.