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Responding to research confirming the link between nurse staffing and patient outcomes, 14 states have introduced legislation to limit patient-to-nurse ratios. However, increased staffing places a considerable financial burden on hospitals.We sought to determine the cost-effectiveness of various nurse staffing ratios.This was a cost-effectiveness analysis from the institutional perspective comparing patient-to-nurse ratios ranging from 8:1 to 4:1. Cost estimates were drawn from the medical literature and the Bureau of Labor Statistics. Patient mortality and length of stay data for different ratios were based on 2 large hospital level studies. Incremental cost-effectiveness was calculated for each ratio and sensitivity and Monte Carlo analyses performed.The study included general medical and surgical patients.We sought to measure costs per life saved in 2003 US dollars.Eight patients per nurse was the least expensive ratio but was associated with the highest patient mortality. Decreasing the number of patients per nurse improved mortality and increased costs, becoming progressively less cost-effective as the ratio declined from 8:1 to 4:1. Nonetheless, the incremental cost-effectiveness did not exceed $136,000 (95% CI $53,000–402,000) per life saved.The model was most sensitive to the effects of patient-to-nurse ratios on mortality. Lower ratios were most cost-effective when lower ratios shortened length of stay, and hourly wages were low. However, throughout the ranges of all these variables, the incremental cost-effectiveness of limiting the ratio to 4:1 never exceeded $449,000 per life saved.As a patient safety intervention, patient-to-nurse ratios of 4:1 are reasonably cost-effective and in the range of other commonly accepted interventions.