To analyse the cost-effectiveness of Baby-Friendly Hospital Initiative (BFHI) in promoting breast-feeding during the first hour of life (BFFHL) and reducing late neonatal mortality.

Cost-effectiveness economic assessment from the health system perspective, preceded by a prospective cohort of mother–baby followed from birth to 6 months of life. The direct costs associated with two health outcomes were analysed: intermediate end point (BFFHL) and final end point (reduction in late neonatal mortality).

Study was carried out in six hospitals in the city of São Paulo (Brazil), three being Baby-Friendly Hospitals (BFH) and three non-BFH.

Mothers with 24 h postpartum, over 18 years old, single fetus and breast-feeding at the time of the interview were included. Poisson regressions adjusted for maternal age and level of education were estimated to identify factors related to BFFHL and late neonatal mortality. Sensitivity analysis was performed to ensure robustness of the economic assessment.

Cost-effectiveness analysis showed that BFHI was highly cost-effective in raising BFFHL by 32·0 % at lower cost in comparison with non-BFHI. In addition, BFHI was cost-effective in reducing late neonatal mortality rate by 13·0 % from all causes and by 13·1 % of infant mortality rate from infections.

The cost-effectiveness of the BFHI in promoting breast-feeding and reducing neonatal mortality rates justifies the investments required for its expansion within the Brazilian health system.