Objective. To perform a cost-effectiveness analysis of subacromial corticosteroid injection combined with exercise compared with exercise alone in patients with moderate to severe shoulder pain from subacromial impingement syndrome. Methods. A within-trial cost-effectiveness analysis with 232 patients randomized to physiotherapy-led injection combined with exercise (n = 115) or exercise alone (n = 117). The analysis was from a health care perspective with 24-week follow-up. Resource use information was collected from all patients on interventions, medication, primary and secondary care contacts, private health care use and over-the-counter purchases. The measure of outcome was quality-adjusted life years (QALYs), calculated from EQ-5D responses at baseline and three further time points. An incremental cost-effectiveness analysis was conducted. Results. Mean per patient NHS costs (£255 vs £297) and overall health care costs (£261 vs £318) were lower in the injection plus exercise arm, but this difference was not statistically significant. Total QALYs gained were very similar in the two trial arms (0.3514 vs 0.3494 QALYs), although slightly higher in the injection plus exercise arm, indicating that injection plus exercise may be the dominant treatment option. At a willingness to pay of £20,000 per additional QALY gained, there was a 61% probability that injection plus exercise was the most cost-effective option. Conclusion. Injection plus exercise delivered by therapists may be a cost-effective use of resources compared with exercise alone and lead to lower health care costs and less time off work. Trial registration: International Standard Randomised Controlled Trial Number Register, http://www.controlled-trials.com/isrctn/, ISRCT 25817033.