Objective: We estimated the cost-effectiveness of home fortification with micronutrient powder delivered in a sales-based programme in reducing the prevalence of Fe deficiency anaemia among children 6-59 months in Bangladesh. Design: Cross-sectional interviews with local and central-level programme staff and document reviews were conducted. Using an activity-based costing approach, we estimated start-up and implementation costs of the programme. The incremental cost per anaemia case averted and disability-adjusted life years (DALY) averted were estimated by comparing the home fortification programme and no intervention scenarios. Setting: The home fortification programme was implemented in 164 upazilas (sub-districts) in Bangladesh. Participants: Caregivers of child 6-59 months and BRAC staff members including community health workers were the participants for this study. Results: The home fortification programme had an estimated total start-up cost of 35·46 million BDT (456 thousand USD) and implementation cost of 1111·63 million BDT (14·12 million USD). The incremental cost per Fe deficiency anaemia case averted and per DALY averted was estimated to be 1749 BDT (22·2 USD) and 12 558 BDT (159·3 USD), respectively. Considering per capita gross domestic product (1516·5 USD) as the cost-effectiveness threshold, the home fortification programme was highly cost-effective. The programme coverage and costs for nutritional counselling of the beneficiary were influential parameters for cost per DALY averted in the one-way sensitivity analysis. Conclusions: The market-based home fortification programme was a highly cost-effective mechanism for delivering micronutrients to a large number of children in Bangladesh. The policymakers should consider funding and sustaining large-scale sales-based micronutrient home fortification efforts assuming the clear population-level need and potential to benefit persists.