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Arthroscopic rotator cuff surgery is one of the most commonly performed orthopedic surgical procedures. We conducted a study to calculate the direct cost of arthroscopic repair of rotator cuff tears confirmed by magnetic resonance imaging. Twenty-eight shoulders in 26 patients (mean age, 54.5 years) underwent primary rotator cuff repair by a single fellowship-trained arthroscopic surgeon in the outpatient surgery center of a major academic medical center. All patients had interscalene blocks placed while in the preoperative holding area. Direct costs of this cycle of care were calculated using the time-driven activity-based costing algorithm. Mean time in operating room was 148 minutes; mean time in recovery was 105 minutes. Calculated surgical cost for this process cycle was $5904.21. Among material costs, suture anchor costs were the main cost driver. Preoperative bloodwork was obtained in 23 cases, adding a mean cost of $111.04. Our findings provide important preliminary information regarding the direct economic costs of rotator cuff surgery and may be useful to hospitals and surgery centers negotiating procedural reimbursement for the increased cost of repairing complex tears.