The purposes of this study were to examine the cost-effectiveness of this technology and to determine improvements in patient outcome needed to make custom total knee cutting blocks cost-effective. A Markov decision model was used to evaluate the cost-effectiveness of custom cutting blocks compared with traditional instrumentation in total knee arthroplasty. The analysis demonstrates routine use of custom cutting blocks for total knee arthroplasty will not be cost-effective unless it results in a significantly reduced revision rate. The reduction necessary increases with increasing costs for the custom blocks. Further research will be necessary to determine if this can be achieved using custom cutting blocks. Patients, surgeons, payers, and institutions should consider this when determining their support of this technology in the absence of supportive data.