An analysis is made of the maximum expenditure which could be justified in embryo transfer in cattle is used to: increase the rate of genetic improvement of dairy or beef cattle; increase the frequency of twin-pregnancies; and expedite a change of breed. Estimates of maximum justifiable expenditure have been compared with an estimate of the cost of non-surgical transfer. Embryo transfer should be used in elite beef herds to increase selection intensity, particularly if bulls from such herds can be used for artificial insemination. Other commercial applications will not be economically justifiable until the cost of transfer has fallen by 50 to 80 per cent.