Diabetic foot ulcers with exposure of tendon, muscle, or bone imply a high probability for deep infections and amputations. Delayed healing times are often described. The aim of this study was to compare the clinical effect and economic cost of cadexomer iodine with standard treatment in diabetic feet with cavity ulcers. Patients with deep, exudative foot ulcers were included in a 12-week open, randomised, comparative study. When ulcers stopped exudating, vaseline gauze was used in both groups until the end of the study. Costs were estimated for dressing material, staff and transportation. Clinically relevant improvement was seen in 12 patients treated with cadexomer iodine and in 13 patients treated with standard treatment. The average weekly cost was SEK 903 and SEK 1,421, respectively, of which the major part was costs for staff and transportation related to frequency of dressing changes. Treatment with cadexomer iodine ointment (Iodosorb) showed no clinical difference compared to topical treatment consisting of gentamicin solution, streptodornase/streptokinase, or dry saline gauze but was associated with considerably lower weekly treatment costs.