Objective: Despite efficacious treatment, alcohol use disorders contribute significantly to the disability burden. Although wider dissemination of evidence-based health care may impact on the population burden, the affordability of this strategy is unknown. This article compares the cost-effectiveness of current treatment for alcohol use disorders with the cost-effectiveness of optimal treatment, a hypothetical treatment scenario that has been informed by evidence-based practice to determine the affordability of such an approach. Method: This study calculated the cost-effectiveness in the Australian population of evidence-based health care for alcohol harmful use and alcohol dependence, as defined by the International Classification of Diseases, Injuries, and Causes of Death, 10th Revision. Outcome was calculated as years lived with disability (YLD) averted. Data from the Australian National Survey of Mental Health and Wellbeing, in conjunction with published meta-analyses and expert reviews, were used to estimate 1-year costs (1997-98 Australian dollars) and YLD averted by current health care services as well as costs and outcomes for an optimal strategy of evidence-based health care. Results: Of those currently seeking treatment, approximately 45% of those with alcohol harmful use and 58% of those with alcohol dependence receive an evidence-based intervention. The cost of this care was estimated at 73 million dollars, resulting in a cost per YLD averted of 96,813 dollars for harmful use of alcohol and 98,095 dollars for alcohol dependence. Under optimal care for harmful use, costs declined and health gains doubled, substantially reducing the cost per YLD averted to 8861 dollars. For dependence, costs doubled, but optimal treatment resulted in increased health gains, reducing the cost per YLD to 57,542 dollars. Conclusions: Evidence-based care for alcohol use disorders would produce greater population health gain at an increased cost for alcohol dependence but at a reduced cost for harmful use of alcohol. For both disorders, there are substantial increases in cost-effectiveness.