Delays in dredging and inability to dredge the nation's harbors, due to the presence of contaminated sediments and the lack of environmentally acceptable disposal sites are interfering with shipping activities and hampering trade growth. The United States Government is committed to provide continuing support to the port industry's goals for enhancing economic growth while protecting, conserving and restoring natural resources within coastal aquatic lands. The government's commitment has resulted in the articulation of a national dredging policy in the Action Plan for Improvement of the Dredging Process in the United States. This national challenge calls for a systematic and consistent decision making approach to dredging and disposal including contaminated sediment management. In building an effective decision mak ing framework for costs, risk reduction and potential beneficial uses of the disposal material must be considered in identifying and evaluating environmentally acceptable and cost-effective disposal alternatives. A conceptual framework for applying a risk-cost trade off approach in making decisions regarding contaminated sediment disposal is presented and applied to a hypothetical disposal scenario involving three alternatives: deepwater confined disposal, nearshore fill or capping and, upland disposal. The approach entails the performance of sequential evaluations consisting of risk analysis, estimation of costs, integration of the results into a computational framework for trade-off analysis, and the application of decision analytical tools to build consensus among stakeholders and the general public in selecting a preferred alternative.