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Background: There are no published, detailed assessments of the direct costs of endoscopic hemostasis for actively bleeding peptic ulcers. We compared the direct costs of care for patients with active ulcer hemorrhage treated with endoscopic or medical-surgical therapies and correlated these costs with patient outcomes., Methods: In a prospective, randomized, controlled trial, 31 patients with active ulcer hemorrhage at emergency endoscopy were randomly assigned to heater probe, injection, or medical-surgical treatment. For further ulcer bleeding, heater probe and injection patients were re-treated endoscopically and medical-surgical patients were referred for surgery. Direct costs were estimated using fixed and variable costs for resources consumed and Medicare reimbursement rates for physician fees., Results: Compared to medical-surgical treatment, the heater probe and injection groups had significantly higher primary hemostasis rates (100% and 90% vs 8%) and lower rates of emergency surgery (0% and 10% vs 75%), blood transfusions, and median direct costs per patient ($4153 and $5247 vs $11,149). Furthermore, compared to medical-surgical treatment, the heater probe group had a significantly lower incidence of severe ulcer rebleeding (11% vs 75%)., Conclusions: Heater probe and injection sclerosis are similarly efficacious treatments for active ulcer hemorrhage, and both treatments yield significantly lower direct costs of medical care and cost savings.