OBJECT Transforaminal lumbar interbody fusion (TLIF) for spondylolisthesis-associated back and leg pain is associated with improvement in pain, disability, and quality of life. However, given the rising health care costs associated with spinal fusion procedures and varying results of recent cost-utility studies, the cost-effectiveness of TLIF remains unclear. The authors set out to assess the comprehensive costs of TLIF at their institution and to determine its cost-effectiveness in the treatment of degenerative spondylolisthesis. METHODS Forty-five patients undergoing TLIF for Grade I degenerative spondylolisthesis-associated back and leg pain after 6-12 months of conservative therapy were included. The authors assessed the 2-year back pain visual analog scale (VAS) score, leg pain VAS score, Oswestry Disability Index, and total back-related medical resource utilization, missed work, and health-state values (quality-adjusted life years [QALYs], calculated from EQ-5D with US valuation). Two-year resource use was multiplied by unit costs based on Medicare national allowable payment amounts (direct cost), and patient and caregiver workday losses were multiplied by the self-reported gross-of-tax wage rate (indirect cost). The mean total 2-year cost per QALY gained after TLIF was assessed. RESULTS Compared with preoperative health states reported after at least 6 months of medical management, a significant improvement in back pain VAS score, leg pain VAS score, and Oswestry Disability Index was observed 2 years after TLIF, with a mean 2-year gain of 0.86 QALYs. The mean ± SD total 2-year cost of TLIF was $36,836 ± $11,800 (surgery cost, $21,311 ± $2800; outpatient resource utilization cost, $3940 ± $2720; indirect cost, $11,584 ± $11,363). Transforaminal lumbar interbody fusion was associated with a mean 2-year cost per QALY gained of $42,854. CONCLUSIONS Transforaminal lumbar interbody fusion improved pain, disability, and quality of life in patients with degenerative spondylolisthesis-associated back and leg pain. The total cost per QALY gained for TLIF was $42,854 when evaluated 2 years after surgery with Medicare fees, suggesting that TLIF is a cost-effective treatment of lumbar spondylolisthesis.