Exercise rehabilitation is a proven, yet poorly available, treatment for intermittent claudication, the primary symptom of peripheral arterial disease (PAD). Exercise rehabilitation is effective, non-invasive, and associated with minimal cardiovascular risk in appropriate patients. Percutaneous transluminal angioplasty (PTA), especially of the iliac segment, is an alternative effective treatment for claudication. There are, however, minimal data currently available to compare the cost-effectiveness of these two interventions. We compared the cost-effectiveness of 3- and 6-month exercise programs with that of iliac PTA without stenting, using the incremental cost-effectiveness ratio [ICER = (Cost2 - Cost1)/(Effectiveness2 - Effectiveness1)]. The ICER represented the price of an additional meter walked derived from each treatment based on conservative models of success of each procedure and specific care assumptions. PTA and exercise efficacy data were derived from a literature review and exercise costs were modeled per the current CPT code 93668. Effectiveness was defined as absolute claudication distance (ACD) at 3 and 6 months. Three treatment alternatives were assessed: (1) no treatment, (2) PTA, and (3) exercise rehabilitation. At 3 months, PTA was more effective than exercise therapy and resulted in an additional 38 meters at an additional cost of $6719, for an ICER of $177/meter. At 6 months, however, exercise was more effective than PTA, resulting in an additional 137 meters walked, and costs less ($61 less per meter gained). In conclusion, exercise rehabilitation at 6 months is more effective and costs less than PTA, and is therefore cost-saving. The cost-effectiveness and availability of claudication treatments has national implications for future PAD care; however, data to inform these care choices can best be obtained in prospective clinical trials.