Background— Kidney transplantation is generally acknowledged as the more clinically effective and more cost-effective option in managing patients with end-stage renal disease, compared with dialysis. This study looked for confirmatory evidence in a Hungarian population. Methods— Patients (n = 242) with end-stage renal disease who received cadaveric kidney transplantation during 1994 were followed up for 3 years. They were compared with patients (n = 840) receiving hemodialysis who were on a waiting list for transplantation. Data were collected retrospectively. Treatments were compared for clinical efficacy and for cost-effectiveness. Results— At month 36, the standard mortality hazard function was 3.5 times higher in the group receiving hemodialysis ( P<.0001) than in the transplant recipients. Average treatment costs per patient over the 3 years were also significantly higher ( P<.0001) in the hemodialysis group than in the group that received transplants. The cost of 1 year gained by transplantation was significantly less ( P<.0001) than the cost associated with hemodialysis. Conclusions— Compared with hemodialysis, kidney transplantation provides greater survival benefits to patients with end-stage renal disease, at less cost.