Background: Although community water fluoridation has been one of the cornerstone strategies for the prevention and control of dental caries, questions are still raised regarding its cost-effectiveness. This study assessed the impact of changing dental needs on the cost savings from community water fluoridation in Australia. Methods: Net costs were estimated as Costs (programme) minus Costs (averted caries). Averted costs were estimated as the product of caries increment in non-fluoridated community, effectiveness of fluoridation and the cost of a carious surface. Modelling considered four age-cohorts: 6-20, 21-45, 46-65 and 66+ years and three time points 1970s, 1980s, and 1990s. Cost of a carious surface was estimated by conventional and complex methods. Real discount rates (4, 7 (base) and 10%) were utilized. Results: With base-case assumptions, the average annual cost savings ⁄ person, using Australian dollars at the 2005 level, ranged from $56.41 (1970s) to $17.75 (1990s) (conventional method) and from $249.45 (1970s) to $69.86 (1990s) (complex method). Under worst-case assumptions fluoridation remained cost-effective with cost savings ranging from $24. 15 (1970s) to $3.87 (1990s) (conventional method) and $107.85 (1970s) and $24.53 (1990s) (complex method). For 66+ years cohort (1990s) fluoridation did not show a cost saving, but costs ⁄ person were marginal. Conclusions: Community water fluoridation remains a cost-effective preventive measure in Australia.