Background: Two-stage exchange arthroplasty remains the gold standard for the management of prosthetic joint infection (PJI) of the knee, but several studies have demonstrated that 1-stage exchange is as effective as 2-stage exchange. This study aimed to support decision-making via an economic evaluation of 1-stage compared to 2-stage exchange for total knee arthroplasty septic revision in patients who did not have compelling indication PJI (ie, Methicillin-resistant Staphylococcus aureus, multiorganism, systemic sepsis, comorbidities, culture negative, resistant organism, and immunocompromised) to undergo a 2-stage exchange. Methods: A cost-utility analysis was performed using a Markov cohort model from the health care provider perspective using Australia data. One-stage septic knee revisions were compared with 2-stage exchange procedures for chronic PJI using a patient-lifetime horizon. Health outcomes were expressed as quality-adjusted life-years (QALY), whereas costs were presented in 2020 Australian dollars. Sensitivity analyses, population expected values of perfect information, and the perfect information for parameters (EVPPI) were assessed to estimate the opportunity costs surrounding the decision made at a willingness-to-pay threshold of $50,000 per QALY. Results: The incremental cost-effectiveness ratio of 2-stage exchange compared with 1-stage exchange was $231,000 per QALY, with 98.5% of the probabilistic sensitivity simulations above the willingness-to-pay threshold. The population expected value of perfect information was $882,000, whereas the expected value of perfect information for parameters for the “cost parameters” was $207,000. Conclusion: The adoption of 1-stage septic knee revision is the optimal choice for patients who have a PJI and who do not have a compelling need for a 2-stage exchange arthroplasty. One-stage exchange for PJI should be advocated in patients who meet the eligibility criteria.