Abstract Bermudagrass is a commonly used turfgrass for home lawns and sports fields. Given increasing pressure to conserve water throughout the U.S., there is a desire by many homeowners to incorporate more drought-tolerant turfgrasses into their landscape. ‘TifTuf' is a new cultivar of bermudagrass that has increased drought tolerance compared to similar cultivars. ‘TifTuf' is currently sold at a premium price compared to other bermudagrass cultivars. However, there is currently no information regarding the payback period and potential water savings for ‘TifTuf'. In this study, we developed a model to evaluate potential cost savings for ‘TifTuf' relative to a conventional bermudagrass. We found cost and water savings are highly dependent on geographic location and water rates. Within the Southeast, the average water savings per year is 12.88 cm with water cost savings around $799 per 0.41 ha. Payback period for a new lawn in the Southeast (recoup only the $0.05 per 0.09 m2 premium) is around 3-4 years, while a payback period for a replacement lawn (recoup the full cost of the lawn, $0.36 per 0.09 m2) is around 21 years. In the Southwest, the water savings and cost savings are higher, implying a shorter payback period. Index words: bermudagrass, ‘TifTuf', drought tolerance. Species used in this study: Cynodon dactylon x C. transvaalensis: DT-1 ‘TifTuf'.