Objectives To assess the clinical effectiveness and cost-effectiveness of minimal incision approaches to total hip replacement (THR) for arthritis of the hip. Data sources Major electronic databases were searched from 1966 to 2007. Relevant websites were also examined and experts in the field were consulted. Review methods Studies of minimal (one or two) incision THR compared with standard THR were assessed for inclusion in the review of clinical effectiveness. A systematic review of economic evaluations comparing a minimal incision approach to standard THR was also performed and the estimates from the systematic review of clinical effectiveness were incorporated into an economic model. Utilities data were sourced to estimate quality-adjusted life-years (QALYs). Due to lack of data, no economic analysis was conducted for the two mini-incision surgical method. Results Nine randomised controlled trials (RCTs), 17 non-randomised comparative studies, six case series and one registry were found to be useful for the comparison of single mini-incision THR with standard THR. One RCT compared two mini-incision THR with standard THR, and two RCTs, five non-randomised comparative studies and two case series compared two mini-incision with single mini-incision THR. The RCTs were of moderate quality. Most had fewer than 200 patients and had a follow-up period of less than 1 year. The single mini-incision THR may have some perioperative advantages, e.g. blood loss [weighted mean difference (WMD) -57.71 ml, p<0.01] and shorter operative time, of uncertain practical significance. It may also offer a shorter recovery period and greater patient satisfaction. Evidence on long-term outcomes (especially revision) is too limited to be useful. Lack of data prevented subgroup analysis. With respect to the two-incision approach, data were suggestive of shorter recovery compared with single-incision THR, but conclusions must be treated with caution. The costs to the health service, per patient, of single mini-incision THR depend upon assumptions made, but are similar at one year (7060 pounds sterling vs 7350 pounds sterling for standard THR). For a 40-year time horizon the costs were 11,618 pounds sterling for mini-incision and 11,899 pounds sterling for standard THR. Two existing economic evaluations were identified, but they added little, if any, value to the current evidence base owing to their limited quality. In the economic model, mini-incision THR was less costly and provided slightly more QALYs in both the 1- and 40-year analyses. The mean QALYs at 1 year were 0.677 for standard THR and 0.695 for mini-incision THR. At 40 years, the mean QALYs were 8.463 for standard THR and 8.480 for mini-incision. At 1 year the probabilistic sensitivity analyses indicate that mini-incision THR has a 95% probability of being cost-effective if society's willingness to pay for a QALY were up to 50,000 pounds sterling. This is reduced to approximately 55% for the 40-year analysis. The results were driven by the assumption of a 1-month earlier return to usual activities and a decreased hospital length of stay and operation duration following mini-incision THR. If mini-incision THR actually required more intensive use of resources it would become approximately 200 pounds sterling more expensive and would only be cost-effective (cost per QALY>30,000 pounds sterling) if recovery was 1.5 weeks faster. A threshold analysis around risk of revision showed, using the same cost per QALY threshold, mini-incision THR would have to have no more than a 7.5% increase in revisions compared with standard THR for it to be no longer considered cost-effective (one more revision for every 200 procedures performed). Further sensitivity analysis involved relaxing assumptions of equal long-term outcomes where possible. and broadly similar results to the base-case analysis were found in this and further sensitivity analyses. Conclusions Compared with standard THR, minimal incision THR has small perioperative advantages in terms of blood loss and operation time. It may offer a shorter hospital stay and quicker recovery. It appears to have a similar procedure cost to standard THR, but evidence on its longer term performance is very limited. Further long-term follow-up data on costs and outcomes including analysis of subgroups of interest to the NHS would strengthen the current economic evaluation.