BACKGROUND: An exclusive human milk diet (EHMD) using human milk based products (pre-term formula and fortifiers) has been shown to lead to significant clinical benefits for very low birth weight (VLBW) babies (below 1250 g). This is expensive relative to diets that include cow's milk based products, but preliminary economic analyses have shown that the costs are more than offset by a reduction in the cost of neonatal care. However, these economic analyses have not completely assessed the economic implications of EHMD feeding, as they have not considered the range of outcomes affected by it. METHODS: We conducted an economic analysis of EHMD compared to usual practice of care amongst VLBW babies in the US, which is to include cow's milk based products when required. Costs were evaluated from the perspective of the health care payer, with societal costs considered in sensitivity analyses. RESULTS: An EHMD substantially reduces mortality and improves other health outcomes, as well as generating substantial cost savings of $16,309 per infant by reducing adverse clinical events. Cost savings increase to $117,239 per infant when wider societal costs are included. CONCLUSIONS: An EHMD is dominant in cost-effectiveness terms, that is it is both cost-saving and clinically beneficial, for VLBW babies in a US-based setting.