To determine the incremental consumption of ventilator resources associated with the improving survival rate of extremely low birthweight (ELBW birthweight 500-999g) infants, from the time assisted ventilation was introduced. Cohort study of ELBW infants born in one tertiary perinatal centre (The Royal Women's Hospital, Melbourne). All ELBW infants born from 1971 to 1993 were included in the study. In hospital survival rates and patient-days of assisted ventilation were the main outcome measures. Discrete eras of relatively stable survival rate and consumption of ventilator resources were identified. These comprised the years 1971-74, 1977-83, 1985-90, and 1992-93. Cost-effectiveness ratios (the incremental consumption of ventilator resources per additional survivor) were calculated between adjacent eras by dividing the increment in the consumption of ventilator resources by the increment in the survival rate. The survival rates rose progressively between eras (6.2, 33.9, 49.1, 68.8%, respectively, as did the consumption of ventilator resources (0.1, 6.6, 16.2, 24.7 patient-days of assisted ventilation per livebirth, respectively). The cost-effectiveness ratio deteriorated initially, increasing from 23.2 to 63.5 additional patient-days of assisted ventilation per additional survivor, but then improved, falling to 43.1 additional patient-days of assisted ventilation per additional survivor in the last era. These changes were even more marked for those of birthweight 750-999g (20.0, 63.2 to 35.9 additional patient-days of assisted ventilation per additional survivor, respectively). In contrast, the cost-effectiveness ratio was initially worse for those of birthweight 500-749 g, being three-fold higher than for the larger infants, and only improved substantially in the last era (59.8, 58.3 to 44.1 additional patient-days of assisted ventilation per additional survivor, respectively). The initial deterioration in cost-effectiveness ratios between successive eras probably reflected the increased availability of resources for assisted ventilation, without any other major advances in perinatal care. The improvement in cost-effectiveness in the last era reflected, in part, the increased use of antenatal steroid therapy and the introduction of exogenous surfactant to neonatal intensive care.