Background: There is little information on the cost and outcome of different treatments for femoral neck fractures. This study aimed to evaluate the cost-effectiveness of internal fixation compared with hemiarthroplasty (HA) for elderly patients with displaced femoral neck fractures. Materials and Methods: A total of 121 patients ≥ 65 years old were divided into internal fixation (n = 58) or HA group (n = 63). Clinical outcome was evaluated by the EuroQol 5 dimensions (EQ-5D) score at 3, 12, and 24 months. The total costs including medical and non-medical expense were collected through hospitalisation information, cost diaries, and telephone interviews. A cost-utility analysis of the total costs in combination with quality-adjusted life years (QALYs) calculated by EQ-5D and survival time was conducted. Results were expressed in incremental cost-effectiveness ratio (ICER). Results: The mean EQ-5D index score in the HA group were higher at the early follow-up (p<0.05). At 24 months there were no differences in EQ-5D between the 2 treatment groups (p>0.05). Over the 2-year period, patients treated with HA gained 0.09–0.10 more QALYs than those treated with internal fixation, while the mean total costs for internal fixation (CNY 55,676) were significantly lower than for HA (CNY 80,297) (P<0.001). ICER indicated that internal fixation may be more cost-effective than HA. Conclusion: HA is associated with better outcome than internal fixation in the treatment of displaced femoral neck fractures in elderly patients. However, internal fixation may be more cost-effective because of less total cost. © 2020