Malaria is one of the leading causes of morbidity and mortality in the developing world and a major public health problem in India. Disillusioned by in-house residual spraying (IRS), and increasingly aware that insecticide-treated nets (ITNs) have proved to be effective in reducing malaria mortality and morbidity in various epidemiological settings, policy-makers in India are keen to identify which is the more cost-effective malaria control intervention. A community randomised controlled trial was set up in Surat to compare the effectiveness and efficiency of IRS and ITNs. Both control strategies were shown to be effective in preventing malaria over the base-case scenario of early diagnosis and prompt treatment. The mean costs per case averted for ITNs was statistically significantly lower (Rs. 1848, 1567-2209; US$ 52) than IRS (Rs. 3121, 2386-4177, US$ 87). The incremental cost-effectiveness ratio for ITNs over IRS was Rs. 799 (US$ 22). The conclusions were robust to changes in assumptions. This study expands the scope of recent comparative economic evaluations of ITNs and IRS, since it was carried out in a low mortality malaria endemic area.