Background Our objective was to compare the complication rates of two common breast reconstruction techniques performed at our hospital and the cost-effectiveness for each test group. Methods All patients who underwent deep inferior epigastric perforator (DIEP) flap and transverse rectus abdominis myocutaneous (TRAM) flap by the same surgeon were selected and matched according to age and mastectomy with or without axillary clearance. Patients from each resultant group were selected, with the patients matched chronologically. The remainder were matched for by co-morbidities. Sixteen patients who underwent immediate breast reconstruction with pedicled TRAM flaps and 16 patients with DIEP flaps from 1999 to 2006 were accrued. The average total hospitalisation cost, length of hospitalisation, and complications in the 2 year duration after surgery for each group were compared. Results Complications arising from both the pedicled TRAM flaps and DIEP flaps included fat necrosis (TRAM, 3/16; DIEP, 4/16) and other minor complications (TRAM, 3/16; DIEP, 1/16). The mean hospital stay was 7.13 days (range, 4 to 12 days) for the pedicled TRAM group and 7.56 (range, 5 to 10 days) for the DIEP group. Neither the difference in complication rates nor in hospital stay duration were statistically significant. The total hospitalisation cost for the DIEP group was significantly higher than that of the pedicled TRAM group (P<0.001). Conclusions Based on our study, the pedicled TRAM flap remains a cost-effective technique in breast reconstruction when compared to the newer, more expensive and tedious DIEP flap.