Aim Colorectal Nurse Specialist (CNS) clinics for postoperative follow up of colorectal cancer aim to maintain clinical efficacy while reducing costs. We prospectively studied the efficacy and financial implications of such a clinic. Method This was a prospective study of all patients attending CNS clinics over 3 years. A lower-risk protocol for patients with Dukes A was used over 3 years and a higher-risk protocol for patients with Dukes B, C or D was used over 5 years. Department of Health Pricing Charts were used to cost the follow-up protocols, and adjustment was performed to calculate the cost of each quality adjusted life year (QALY) gained. Results One hundred and ninety-three patients entered into this nurse-led follow-up protocol implemented by the CNS clinic between 2005 and 2007. The Dukes stages and proportions of patients in each stage were as follows: stage A, 13%; stage B, 8%; stage C, 36.3%; and stage D, 9.3%. Ninety-seven per cent underwent curative treatment and 2.6% had palliative treatment. Twenty-one per cent of patients developed recurrent disease. Overall actuarial 5-year survival was 80% and recurrences had a 30% 5-year actuarial survival. The total cost per patient for 3 years of follow up was 1506 pound and 1179 pound for lower-risk rectal and nonrectal cancers, respectively. The adjusted cost for each QALY gained for lower-risk tumours was 1914 pound. The total cost per patient with higher-risk tumours was 1814 pound and 1487 pound for rectal and nonrectal tumours, respectively. The adjusted cost for each QALY gained was 2180 pound for higher-risk tumours. Conclusions This clinic demonstrated cost-effective detection of recurrent disease. Computed tomography (CT) was the most sensitive alert test. As all recurrences were detected within 4 years, we suggest that this is the indicated time to follow up.