Objective: The objective of this study is to assess the clinical- and cost-effectiveness of intensive short-term dynamic psychotherapy (ISTDP) for patients with chronic pain. Method: A sample of 228 pain patients was drawn from a larger naturalistic study of ISTDP. They received an average of 6.1 sessions delivered by 31 therapists. Psychiatric symptoms and interpersonal problems were assessed at three time points. Healthcare data from baseline year and three years following treatment came from independent governmental databases. Results: Multilevel models indicated significant reductions in symptoms and interpersonal problems during treatment, including a moderate to large pre-post effect size (d = 0.76) for somatization. Further, the sample had successive reductions in yearly healthcare costs, reaching the normal population mean two years post-treatment. Conclusion: Within the limitations of the uncontrolled design, our study suggests that ISTDP may be both clinically effective and cost-effective for patients with chronic pain.