Maintaining an active hospital microbiology laboratory allows definitive antibiotic treatment for bacterial infections to be given in a timely manner. This would be expected to improve patient outcomes and shorten length of hospital stay. However, many hospitals in low- and middle-income countries lack access to microbiology services, and the cost-effectiveness of an active microbiology service is unknown. We constructed a decision tree and performed a cost-effectiveness model analysis to determine whether maintaining an active microbiology laboratory service would be cost-effective in Timor-Leste, a lower middle-income country. The analysis was informed by local microbiology data, local patient treatment costs, results of an expert elicitation exercise and data from literature reviews. The results indicate that there is a high probability that maintaining an active microbiology laboratory is a cost-effective intervention that would both improve patient outcomes and reduce net costs (due to reduced intensive care admissions and potential costs of resistant infections) compared to no microbiological testing, especially for the hospitalised paediatric patients with suspected primary bacteraemia. This remained true under various one-way sensitivity analyses, including when accuracy of microbiological testing is low, prevalence of bacterial infection among patients with suspected bloodstream infection was high, and prevalence of antibiotic resistance was high.