BACKGROUND: Out-of-pocket expenditures of over 34 billion dollars per year in the US are an apparent testament to a widely held belief that complementary and alternative medicine (CAM) therapies have benefits that outweigh their costs. However, regardless of public opinion, there is often little more than anecdotal evidence on the health and economic implications of CAM therapies. The objectives of this study are to present an overview of economic evaluation and to expand upon a previous review to examine the current scope and quality of CAM economic evaluations. METHODS: The data sources used were Medline, AMED, Alt-HealthWatch, and the Complementary and Alternative Medicine Citation Index; January 1999 to October 2004. Papers that reported original data on specific CAM therapies from any form of standard economic analysis were included. Full economic evaluations were subjected to two types of quality review. The first was a 35-item checklist for reporting quality, and the second was a set of four criteria for study quality (randomization, prospective collection of economic data, comparison to usual care, and no blinding). RESULTS: A total of 56 economic evaluations (39 full evaluations) of CAM were found covering a range of therapies applied to a variety of conditions. The reporting quality of the full evaluations was poor for certain items, but was comparable to the quality found by systematic reviews of economic evaluations in conventional medicine. Regarding study quality, 14 (36%) studies were found to meet all four criteria. These exemplary studies indicate CAM therapies that may be considered cost-effective compared to usual care for various conditions: acupuncture for migraine, manual therapy for neck pain, spa therapy for Parkinson's, self-administered stress management for cancer patients undergoing chemotherapy, pre- and post-operative oral nutritional supplementation for lower gastrointestinal tract surgery, biofeedback for patients with "functional" disorders (eg, irritable bowel syndrome), and guided imagery, relaxation therapy, and potassium-rich diet for cardiac patients. CONCLUSION: Whereas the number and quality of economic evaluations of CAM have increased in recent years and more CAM therapies have been shown to be of good value, the majority of CAM therapies still remain to be evaluated.