To demonstrate whether the use of videophone technology is an effective alternative method to direct observation of tuberculosis (TB) medication administration, a retrospective chart review and data analysis were performed on records for 57 patients with active TB in two Washington state counties who utilized videophone technology for the administration of medications from 2002 through 2006. A total of US$139,546 was saved in staff salaries, benefits and travel costs. The average cost savings per patient was US$2448. The use of videophone technology is a cost-effective alternative to in-home directly observed administration of TB medication.