ABSTRACT Aims Buprenorphine is an effective alternative to methadone for treatment of opioid dependence, but economic concerns represent a barrier to implementation. The economic impacts of buprenorphine adoption by the US Veterans Health Administration (VHA) were examined. Design Prescriptions of buprenorphine, methadone treatment visits, health-care utilization and cost, and diagnostic data were obtained for 2005. Findings VHA dispensed buprenorphine to 606 patients and methadone to 8191 other patients during the study year. An analysis that controlled for age and diagnosis found that the mean cost of care for the 6 months after treatment initiation was $11 597 for buprenorphine and $14 921 for methadone (P < 0.001). Cost was not significantly different in subsequent months. The first 6 months of buprenorphine treatment included an average of 66 ambulatory care visits, significantly fewer than the 137 visits in methadone treatment (P < 0.001). In subsequent months, buprenorphine patients had 8.4 visits, significantly fewer than the 21.0 visits of methadone patients (P < 0.001). Compared to new methadone episodes, new buprenorphine episodes had 0.634 times the risk of ending [95% confidence interval 0.547–0.736]. Implementation of buprenorphine treatment was not associated with an influx of new opioid-dependent patients. Conclusion Despite the higher cost of medication, buprenorphine treatment was no more expensive than methadone treatment. VHA methadone treatment costs were higher than reported by other providers. Although new buprenorphine treatment episodes lasted longer than new methadone episodes, buprenorphine is recommended for more adherent patients.