PURPOSE: to determine the frequency with which ultrasonographically (US) guided core biopsy obviated diagnostic surgical biopsy of nonpalpable breast masses, to calculate the cost savings of diagnosis attributable to US-guided core biopsy, and to compare the cost of US-guided versus stereotactically guided core biopsy. MATERIALS AND METHODS: US-guided core biopsy was performed in 151 consecutive solitary, nonpalpable breast masses in 151 women (age range, 23-80 years) by using a 14-guage automated gun and needle. Clinical follow-up data were obtained. cost savings were assessed by using national Medicare reimbursement costs of $385 for US-guided core biopsy, $610 for stereotactic core biopsy, and $1,332 for needle localization and surgical biopsy. RESULTS: US-guided core biopsy obviated a surgical procedure in 128 (85%) of 151 women. The mean adjusted direct cost saving per US-guided core biopsy was $744 per case. Use of US-guided biopsy decreased the cost of diagnosis by 56% ($744,/$1,332) over the cost of surgical biopsy. If biopsy had been performed with stereotactic rather than with US guidance, the mean adjusted direct cost saving would have been $519 per case, a 39% ($519/$1,332) decrease in the cost of diagnosis compared with th cost of surgical biopsy. CONCLUSION: Percutaneous biopsy of a nonpalpable breast mass with either US or stereotactic guidance is less expensive than surgery, but cost savings are greater with US-guided biopsy.