BACKGROUND: Malaria in pregnancy is a public health problem for endemic countries. Economic evaluations of malaria preventive strategies in pregnancy are needed to guide health policies. METHODS AND FINDINGS: This analysis was carried out in the context of a trial of malaria intermittent preventive treatment in pregnancy with sulphadoxine-pyrimethamine (IPTp-SP), where both intervention groups received an insecticide treated net through the antenatal clinic (ANC) in Mozambique. The cost-effectiveness of IPTp-SP on maternal clinical malaria and neonatal survival was estimated. Correlation and threshold analyses were undertaken to assess the main factors affecting the economic outcomes and the cut-off values beyond which the intervention is no longer cost-effective. In 2007 US$, the incremental cost-effectiveness ratio (ICER) for maternal malaria was 41.46 US$ (95% CI 20.5, 96.7) per disability-adjusted life-year (DALY) averted. The ICER per DALY averted due to the reduction in neonatal mortality was 1.08 US$ (95% CI 0.43, 3.48). The ICER including both the effect on the mother and on the newborn was 1.02 US$ (95% CI 0.42, 3.21) per DALY averted. Efficacy was the main factor affecting the economic evaluation of IPTp-SP. The intervention remained cost-effective with an increase in drug cost per dose up to 11 times in the case of maternal malaria and 183 times in the case of neonatal mortality. CONCLUSIONS: IPTp-SP was highly cost-effective for both prevention of maternal malaria and reduction of neonatal mortality in Mozambique. These findings are likely to hold for other settings where IPTp-SP is implemented through ANC visits. The intervention remained cost-effective even with a significant increase in drug and other intervention costs. Improvements in the protective efficacy of the intervention would increase its cost-effectiveness. Provision of IPTp with a more effective, although more expensive drug than SP may still remain a cost-effective public health measure to prevent malaria in pregnancy. TRIAL REGISTRATION: ClinicalTrials.gov NCT00209781.