Treatment of fetal macrosomia presents challenges to practitioners because a potential outcome of shoulder dystocia with permanent brachial plexus injury is costly both to families and to society. Practitioner options include labor induction, elective cesarean delivery, or expectant treatment. We performed a cost-effective analysis to evaluate the treatment strategies that were preferred to prevent the most permanent brachial plexus injuries with the least amount of dollars spent. Study design: Using decision analysis techniques, we compared 3 strategies for an infant with an estimated fetal weight of 4500 g: labor induction, elective cesarean delivery, and expectant treatment. The following baseline assumptions were made: Probability of shoulder dystocia in vaginal delivery, .145; labor induction, .03; cesarean delivery, .001; probability of plexus injury, .18; probability of permanent injury, .067; probability of cesarean delivery with induction, .35; with expectant treatment, .33; cost of vaginal delivery, ＄ 3376; cost of elective cesarean delivery, ＄ 5200; cost of cesarean delivery with labor, ＄ 6500; lifetime cost of brachial plexus injury, ＄ 1,000,000. Sensitivity analyses were performed. Results: Under baseline assumptions for an infant who weighs 4500 g, expectant treatment is the preferred strategy at a cost of ＄ 4014.33 per injury-free child, compared with elective cesarean delivery at a cost of ＄ 5212.06 and an induction cost of ＄ 5165.08. Sensitivity analyses revealed that, if the incidence of shoulder dystocia and permanent injury remained < 10% , expectant treatment is the preferred method. Conclusion: Fetal macrosomia with possible permanent plexus injuries is a concern. Our analysis would suggest that expectant treatment is the most cost-effective approach to this problem. Treatment of fetal macrosomia presents challenges to practitioners because of potential outcome of shoulder dystocia with permanent brachial plexus injury is costly both to families and to society. Practitioner options include labor induction, elective cesarean delivery, or expectant treatment. We performed a cost-effective analysis to evaluate the treatment strategies that were preferred to prevent the most permanent brachial plexus injuries with the least amount of dollars spent. Study design: Using decision analysis techniques, we compared 3 strategies for an infant with an estimated fetal weight of 4500 g: labor induction The following baseline assumptions were made: Probability of shoulder dystocia in vaginal delivery, .145; labor induction, .03; cesarean delivery, .001; probability of plexus injury, .18; probability of permanent injury, .067; probability of cesarean delivery with induction, .35; with expectant treatment, .33; c cost of elective cesarean delivery, $ 5200; cost of cesarean delivery with labor, $ 6500; lifetime cost of brachial plexus injury, $ 1,000,000. Sensitivity analyzes were performed. Results: Under baseline assumptions for an infant who weighs 4500 g, expectant treatment is the preferred strategy at a cost of $ 4014.33 per injury-free child, compared with elective cesarean delivery at a cost of $ 5212.06 and an induction cost of $ 5165.08. Sensitivity analyzes shows that, if the incidence of shoulder dystocia and permanent injury remains <10%, expectant treatment is the preferred method. Conclusion: Fetal macrosomia with possible permanent plexus injuries is a concern. Our analysis would suggest that expectant treatment is the most cost-effective approach to this problem.