Abstract Aims Depression and anxiety are among the most common mental health conditions treated in primary care. They frequently co-occur and involve recommended treatments that overlap. Evidence from randomised controlled trials (RCTs) shows specific stepped care interventions to be cost-effective in improving symptom remission. However, most RCTs have focused on either depression or anxiety, which limits their generalisability to routine primary care settings. This study aimed to evaluate the cost-effectiveness of a collaborative stepped care (CSC) intervention to treat depression and/or anxiety among adults in Australian primary care settings. Method A quasi-decision tree model was developed to evaluate the cost-effectiveness of a CSC intervention relative to care-as-usual (CAU). The model adapted a CSC intervention described in a previous Dutch RCT to the Australian context. This 8-month, cluster RCT recruited patients with depression and/or anxiety ( n = 158) from 30 primary care clinics in the Netherlands. The CSC intervention involved two steps: (1) guided self-help with a nurse at a primary care clinic; and (2) referral to specialised mental healthcare. The cost-effectiveness model adopted a health sector perspective and synthesised data from two main sources: RCT data on intervention pathways, remission probabilities and healthcare service utilisation; and Australia-specific data on demography, epidemiology and unit costs from external sources. Incremental costs and incremental health outcomes were estimated across a 1-year time horizon. Health outcomes were measured as disability-adjusted life years (DALYs) due to remitted cases of depression and/or anxiety. Incremental cost-effectiveness ratios (ICERs) were measured in 2019 Australian dollars (A$) per DALY averted. Uncertainty and sensitivity analyses were performed to test the robustness of cost-effectiveness findings. Result The CSC intervention had a high probability (99.6%) of being cost-effective relative to CAU. The resulting ICER (A$5207/DALY; ...