Background Although tuberculosis is a major cause of morbidity and mortality worldwide, available funding falls far short of that required for effective control. Economic and spillover consequences of investments in the treatment of tuberculosis are unclear, particularly when steep gradients in the disease and response are linked by population movements, such as that between Papua New Guinea (PNG) and the Australian cross-border region. Objective To undertake an economic evaluation of Australian support for the expansion of basic Directly Observed Treatment, Short Course in the PNG border area of the South Fly from the current level of 14% coverage. Methods Both cost-utility analysis and cost-benefit analysis were applied to models that allow for population movement across regions with different characteristics of tuberculosis burden, transmission, and access to treatment. Cost-benefit data were drawn primarily from estimates published by the World Health Organization, and disease transmission data were drawn from a previously published model. Results Investing $16 million to increase basic Directly Observed Treatment, Short Course coverage in the South Fly generates a net present value of roughly $74 million for Australia (discounted 2005 dollars). The cost per disability-adjusted life-year averted and quality-adjusted life-year saved for PNG is $7 and $4.6, respectively. Conclusions Where regions with major disparities in tuberculosis burden and health system resourcing are connected through population movements, investments in tuberculosis control are of mutual benefit, resulting in net health and economic gains on both sides of the border. These findings are likely to inform the case for appropriate investment in tuberculosis control globally.