To establish the cost-effectiveness of long-term humidification therapy (LTHT) added to usual care for patients with moderate or severe chronic obstructive pulmonary disease or bronchiectasis.Resource usage in a 12-month clinical trial of LTHT was estimated from hospital records, patient diaries, and the equipment supplier. Health state utility values were derived from the St. Georges Respiratory Questionnaire (SGRQ) total score. All patients who remained in the trial for 12 months and who had at least 90 days of diary records were included (87 of 108).Clinical costs were NZ $3973 (95% confidence interval [CI] $1614-$6332) for the control group and NZ $3331 (95% CI $948-$6920) for the intervention group. The mean health benefit per patient was -6.9 SGRQ units (95% CI -13.0 to -7.2; P < 0.05) or +0.0678 quality-adjusted life-years (95% CI 0.001-0.135). With the intervention costing NZ $2059 annually, the mean cost per quality-adjusted life-year was NZ $20,902 (US $18,907) and the bootstrap median was NZ $19,749 (2.5th percentile -$40,923, 97.5th percentile $221,275). At a willingness-to-pay (WTP) threshold of NZ $30,000, the probability of cost-effectiveness was 61%, ranging from 49% to 72% as the cost of LTHT was varied by ±30%. At a WTP of NZ $20,000, the probability was 49% (range 34%-61%).LTHT is moderately cost-effective for patients with moderate to severe chronic obstructive pulmonary disease or bronchiectasis at a WTP threshold that is acceptable for public funding of medicines in New Zealand. These findings must be interpreted with caution because of the modest size of the clinical study, necessary lack of blinding in the clinical trial, and uncertainty in estimating health state utility from the SQRQ.