Blackleg (
BL
) is an acute to peracute highly fatal infectious disease of mainly large ruminants characterised by lesions of myonecrosis caused by
Clostridium chauvoei,
usually presenting as a sudden onset of sporadic mortalities. In Southeast Asia, ‘
BL
’ is considered a cause of occasional outbreaks of a subacute febrile illness, although there are few published reports available. Investigation of a major outbreak of clinically diagnosed
BL
occurring in large ruminants (cattle and buffalo) in three neighbouring villages in central Laos in mid‐2017, was conducted to determine the financial impacts of
BL
on smallholder livelihoods. Owners of
BL
‐infected large ruminants in the three affected villages were interviewed (
n
= 27) and financial losses including losses due to mortality, morbidity and costs of treatments, were determined. The reports of clinical signs of subcutaneous swelling with palpable crepitus in febrile animals were considered consistent with a diagnosis of
BL
. The outbreak occurred in 47 of a total 449 households with large ruminants across the three villages, affecting 147 of a total population of 3505 ‘at risk’ large ruminants with 71 deaths reported. At the household level, the mean morbidity and mortality rates were 5 ± 4(95%
CI
: 3–6) and 3 ± 2(95%
CI
: 1–4) heads per household, respectively. The estimated financial losses due to
BL
per affected household was
USD
822 ± 692(95%
CI
: 518–1125), being 122% of their annual household income from large ruminant sales. The comparison between the estimated losses due to
BL
per village and cost of annual
BL
vaccination programmes, indicated a potential economic benefit of
USD
3.09 and
USD
12.37 for every dollar invested in the vaccination programme, if
BL
outbreaks occur every 20 and 5 years, respectively. This study indicates that clinically diagnosed
BL
can cause significant losses to smallholder households, and requires Lao animal health authorities to consider vaccination interventions to prevent losses from re‐emergence of
BL
in the known endemically affected areas.