Background Fractures are one of the most costly consequences of falls in elderly patients in nursing homes. Objectives To compare the cost-effectiveness of a 'multifactorial fracture prevention program' provided by a multidisciplinary team with 'no prevention' in newly admitted nursing home residents. Methods We performed a cost-utility analysis using a Markov-based simulation model to establish the effectiveness of a multifaceted fall prevention program from the perspective of statutory health insurance (SHI) and long-term care insurance (LCI). The rate of falls was used to estimate the clinical and economic consequences resulting from hip and upper limb fractures. Robustness of the results was assessed using deterministic and probabilistic sensitivity analyses. Results Compared to no prevention a multifactorial prevention program for nursing home residents resulted in a cost-effectiveness ratio of €21,353 per quality-adjusted life-year. The total costs for SHI/LCI would result in €1.7 million per year. Results proved to be robust following deterministic and probabilistic sensitivity analyses. Conclusion Multifactorial fracture prevention appears to be cost-effective in preventing fractures in nursing home residents. Since the results were based on the number of falls further research is required to confirm the results.