Objective. Percutaneous needle aspiration (PNA) has been widely used to diagnose bone malignancies. Successful aspirates hinge on the ability of the operator to obtain an adequate or diagnostic sample, and a skilled cytologist to make a diagnosis on needle aspirates. False-negative aspirates could pose a serious problem. This study is designed to evaluate the cost-effectiveness of PNA in the diagnosis of skeletal neoplasms using a cost minimization approach. Design. All PNA performed over a 44-month period were reviewed retrospectively. Ninety-four skeletal biopsies were performed to diagnose a clinically or roentgenographically suspicious lesion: 69 for a suspected metastatic malignancy, and 25 for a suspected primary malignancy, The PNA results were collected and reviewed, sensitivities and specificities were determined (compared with open biopsy results or clinical follow-up as the gold standards), and the probabilities were applied to a decision tree. Charges were obtained from the patient's billing and converted into costs by a cost-charge ratio. Sensitivity analysis was performed to determine the costs of each branch of the decision tree, and ultimately the final cost of the two strategies: (1) PNA for all suspected neoplasms followed by open biopsy for negative and non-diagnostic PNA results, or (2) open biopsy for all suspected neoplasms. Results. In diagnosing a suspected metastatic skeletal neoplasm, PNA had a sensitivity of 88%, a specificity of 100%, and a non-diagnostic re suit in 3% of cases. Cost analysis determined a savings of $ US 2486 per patient when ''PNA strategy'' was used instead of ''open biopsy strategy''. In diagnosing a suspected primary neoplasm, PNA hat a sensitivity 75%, a specificity of 100%, and a non-diagnostic result in 16% of cases. Cost analysis determined a savings of $ US 954 per patient when ''PNA strategy'' was used instead of ''open biopsy strategy''. By using ''PNA strategy'' instead of ''open biopsy strategy'' at this institution we would have saved $ US 195384 over the 44-month period. Conclusions. Metastatic skeletal neoplasms could be reliably diagnosed by PNA, and followed by open biopsy if the PNA result is negative or non-diagnostic, at a significant cost saving over open biopsy. Diagnosing primary skeletal neoplasms using ''PNA strategy'' offers a slight cost saving compared with ''open biopsy strategy'', but too few primary skeletal neoplasms were evaluated to recommend the best diagnostic approach.