Background: Determining the cost‐effectiveness of technological interventions is a crucial aspect in assuring these interventions can be adopted. The FamTechCare intervention is an innovative telehealth support that links family caregivers of persons living with dementia to tailored feedback from dementia care experts based on caregiver‐initiated video recordings of challenging care situations. The FamTechCare intervention has demonstrated significant reductions in caregiver depression and increases in caregiver competence when compared to standard telephone support. The purpose of this article is to report on the cost‐effectiveness of the FamTechCare telehealth intervention. Methods: Process‐based costing and a cost‐effectiveness analysis using the incremental cost‐effectiveness ratio (ICER) was completed with 68 caregiver and person living dementia with dyads. Results: The cost of the 12‐week FamTechCare telehealth intervention was found to be greater ($48.43 per dyad per week) due to the telehealth equipment, recording application, and expert panel time compared with the telephone support intervention ($6.96 per dyad per week). The ICER was $18.51 for caregiver depression and $36.31 for caregiver competence indicating that it cost no more than $36.38 per dyad per week over 12 weeks to achieve significant improvement in depression and competence in the FamTechCare caregivers compared to the telephone support caregivers. Conclusion: The FamTechCare intervention appears to be cost‐effective when compared to the telephone support intervention and remains near the willingness‐to‐pay threshold for caregivers providing in‐home dementia care support.