Previous cost-benefit analyses of drug courts have relied on proxy estimates, self-report data, or non-local data. However, policymakers at the local level need to understand the benefits of investing resources in local drug courts. The current cost-benefit analysis relied on data from 87 individuals who participated in a single drug court and from 68 individuals who went through the traditional court processes. All 155 participants were tracked for 18 months; information were gathered regarding criminal history and criminal involvement following drug court or traditional court participation. The analysis focused on both an overall and an agency specific cost-analysis using a transactional cost economic model capable of estimating complex multiple agency contributions to costs. The findings reveal that drug courts can be a cost efficient way of handling drug offenders. The cost advantages in drug courts occurred immediately and favorable outcomes were achieved in terms of subsequent offending behavior. The overall cost of drug court was estimated at $1,441.52 for all the agencies involved. Criminal justice agencies were found to contribute to the costs of drug court unequally, with the district attorney, the court, and treatment agencies investing the most. Future work should continue to analyze the costs versus benefits of local drug courts on a court-by-court basis in order to inform local policies. Tables, notes, references