The first drug court in New South Wales began operating on February 8, 1999. It was established on a trial basis, initially for a period of 2 years. Modeled on U.S. drug courts, the New South Wales Drug Court provides an intensively supervised program of treatment for drug-dependent offenders, with the aim of assisting them to overcome their drug dependence and end their involvement in criminal activity. The aim of the evaluation reported in this bulletin was to determine the cost-effectiveness of the Drug Court in reducing recidivism. The study involved comparing Drug Court participants with a comparison group of offenders found eligible for the Drug Court program, but for whom there was no place available in the program. The cost-effectiveness of the Drug Court in dealing with the Drug Court participants was compared with that of the conventional criminal justice system in dealing with the comparison group. The key findings to date are that 224 persons have been placed in the Drug Court Program, and two-thirds of these were still in the program as of January 31, 2000; progress through the program has been somewhat slower than anticipated; urine testing has proved to be an unreliable indicator of program success, but only about 13 percent of participants have been sentenced for new offenses committed while on the program. This last result is encouraging, given the normally high level of recidivism of heroin-dependent property offenders. 6 figures, 9 tables, and 24 notes