Hypochondriasis is highly prevalent in medical settings, has detrimental effects for affected individuals, and is associated with high societal costs. Although cognitive behavior therapy (CBT) has been shown to be effective in the treatment of hypochondriasis, it is not widely available because of a lack of properly trained therapists. Therefore, it is essential to evaluate therapy forms that require less therapist time. The authors investigated the effect and economic impact of group CBT delivered in a psychiatric setting among 24 people with hypochondriasis. A within-group design with prolonged baseline was used, and all participants received 10 weeks of group-based treatment. The primary outcome measures were the Health Anxiety Inventory and the Illness Attitude Scales. Results indicate significant improvement on both measures at posttreatment and 6-month follow-up (Cohen's d = 1.03-1.72). Medical and nonmedical costs were substantially lowered. The authors conclude that group-based CBT delivered in a psychiatric setting is an effective and potentially highly cost-effective treatment for hypochondriasis.