Objective: To compare the health outcomes, costs, and incremental cost-effectiveness of universal neonatal screening for sickle cell disease (SCD) with screening targeted to African Americans. Study design: A cost-effectiveness analysis was done by using a Markov simulation model that considered the costs and outcomes associated with the prevention and treatment of sepsis in those with sickle cell anemia and sickle β⁰-thalassemia. Three strategies were compared: (1) no screening, (2) targeted screening of African Americans, and (3) universal screening for SCD. Results: In the base case analysis, targeted screening of African Americans compared with no screening cost $6709 per additional year of life saved, and universal screening compared with targeted screening cost $30,760 per additional year of life saved. In a sensitivity analysis, the cost per additional year of life saved with universal screening compared with targeted screening was positively correlated with the delivery rate of targeted screening and was inversely related to the proportion of African Americans in the population. Conclusions: Targeted screening of African American newborns for SCD compared with no screening is always cost-effective. Universal screening compared with targeted screening always identifies more infants with disease, prevents more deaths, and is cost-effective given certain delivery rates for targeted screening and proportions of African Americans in the population. (J Pediatr 2000;136;201-8)