Background Behaviours such as agitation impact on the quality of life of care-home residents with dementia and increase healthcare use. Interventions to prevent these behaviours have little evidence supporting their effectiveness or cost-effectiveness. We conducted an economic evaluation alongside a trial assessing Dementia Care Mapping™ (DCM) versus usual care for reducing agitation, and highlight methodological challenges of conducting evaluations in this population and setting. Methods RCT data over 16 months from English care-home residents with dementia (intervention n = 418; control n = 308) were analysed. We conducted a cost-utility analysis from the healthcare provider perspective. We gathered resource use and utility (EQ-5D-5L and DEMQoL-Proxy-U) from people living with dementia and proxy informants (staff and relatives). Data were analysed using seemingly unrelated regression, accounting for care-home clustering and bootstrapping used to capture sampling uncertainty. Results Costs were higher in the intervention arm than in the control arm (incremental = £1479) due in part to high cost outliers. There were small QALY gains (incremental = 0.024) in favour of DCM. The base-case ICER (£64,380 per QALY) suggests DCM is not cost-effective versus usual care. With the exception of analyses excluding high cost outliers, which suggested a potential for DCM to be cost-effective, sensitivity analyses corroborated the base-case findings. Bootstrapped estimates suggested DCM had a low probability (< 0.20 where λ = £20,000) of being cost-effective versus control. Conclusion DCM does not appear to be a cost-effective intervention versus usual care in this group and setting. The evaluation highlighted several methodological challenges relating to validity of utility assessments, loss to follow-up and compliance. Further research is needed on handling high-cost individuals and capturing utility in this group. ISRCTN reference 82288852.Dementia Care Mapping is not cost-effective versus usual care in preventing or supporting agitation in carehome residents with dementia.The trial highlighted a number of challenges to the economic evaluation that future studies should consider at design stage including dealing with: low intervention compliance; high levels of missing data; uncertain validity of utility assessments in this population; and high cost outliers.