OBJECTIVE: To demonstrate an approach to measuring the cost and value of quality improvement (QI) implementation in local health departments (LHDs). DESIGN: We conducted cost estimation for 4 LHD QI projects and return-on-investment (ROI) analysis for 2 selected LHD QI projects. SETTING AND PARTICIPANTS: Four Nebraska LHDs varying in rurality and jurisdiction size. MAIN OUTCOME MEASURES: Total costs, unit costs, incremental cost-effectiveness ratios, and ROI. RESULTS: The 4 QI projects vary significantly in their cost estimates. Estimated ROI ratios for 2 QI projects predicted significant savings in health care utilization for respective program participants. A QI project focused on improving breastfeeding rates in WIC (women, infants, and children) clients had a predicted ROI ratio of 3230% and a QI project for improving participation in a Chronic Disease Self-Management Program would need only 34 new participants to have a positive ROI. CONCLUSIONS: We demonstrated how data can be collected and analyzed for cost estimation and ROI analysis to quantify the economic value of QI for LHDs. Our ROI analysis shows that QI initiatives have great potential to enhance the value of LHDs' public health services. A better understanding of the costs and value of QI will enable LHDs to appropriately allocate and utilize their limited resources for suitable QI initiatives.