Introduction. Negative pressure wound therapy (NPWT; also known as vacuum-assisted wound closure) has emerged as a promising option that may result in better health outcomes. Objective. This study analyzed the cost-utility of NPWT compared with traditional wound care (TWC) for the treatment of patients with diabetic foot ulcers in Iran from the perspective of health care providers. Materials and Methods. This economic evaluation study was conducted in 2016 to estimate the incremental cost effectiveness ratio of NPWT compared with TWC. The Markov model was applied, incorporating the 7 health states of uninfected, infected, infected post-amputation, healed, healed post-amputation, amputation, and death for a 1-year time period and monthly cycles (12 cycles). Quality-adjusted life years (QALYs) were calculated from utility weights of each diagnosis, which were derived from the published literature. Costs for each diagnosis were estimated monthly and separately based on inpatient and outpatient care. The analysis of cost-effectiveness and sensitivity for uncertain parameters was carried out using TreeAge Pro 2011 software. Results. A total of 200 patient records (NPWT = 100; TWC = 100) were analyzed in this study. The results indicated that annual cost per patient for NPWT and TWC strategies were $5165 ± $3258 and $9833 ± $5861, respectively. In addition, mean effectiveness per patient per year for NPWT and TWC strategies were 8.9026 ± 1.7622 and 8.7974 ± 1.855 QALYs, respectively. When treatment with NPWT was compared with TWC using the incremental cost-effectiveness ratio of -$44 370 per QALY, NPWT was shown as a more cost-effective treatment strategy than TWC. Conclusions. The results of the study show that NPWT is less costly and more effective compared with TWC. In addition, NPWT reduces the number of amputations and increases the number of healed wounds, decreasing patients’ and payers’ costs. The sensitivity analysis of parameters proved the robustness of the Markov model.