Objective (1) Determine the incidence and risk factors for congenital hearing loss. (2) Perform cost analysis of screening programs. Study Design Proportionally distributed cross-sectional survey. Setting Jinotega, Nicaragua. Subjects and Methods Otoacoustic emissions (OAEs) were used to screen 640 infants <6 months of age from neonatal intensive care unit, institutional, and home birth settings. Data on 15 risk factors were analyzed. Cost of 4 implementation strategies was studied: universal screening, screening at the regional health center (RHC), targeted screening, and screening at the RHC plus targeted screening. Cost-effectiveness analysis over 10 years was based on disability-adjusted life year estimates, with the World Health Organization standard of cost-effectiveness ratio (CER) / gross domestic product (GDP) <3, with GDP set at $4884.15. Results Thirty-eight infants failed the initial OAE (5.94%). In terms of births, 325 (50.8%) were in the RHC, 69 (10.8%) in the neonatal intensive care unit, and 29 (4.5%) at home. Family history and birth defect were significant in univariate analysis; birth defect was significant in multivariate analysis. Cost-effectiveness analysis demonstrated that OAE screening is cost-effective without treatment (CER/GDP = 0.06-2.00) and with treatment (CER/GDP = 0.58-2.52). Conclusions Our rate of OAE failures was comparable to those of developed countries and lower than hearing loss rates noted among Nicaraguan schoolchildren, suggesting acquired or progressive etiology in the latter. Birth defects and familial hearing loss correlated with OAE failure. OAE screening of infants is feasible and cost-effective in rural Nicaragua, although highly influenced by estimated hearing loss severity in identified infants and the high travel costs incurred in a targeted screening strategy.