The study evaluates the cost-effectiveness of an improved yam flour production technology (from Dioscorea rotundata Poir.), developed at the National Root Crops Research Institute, Umudike, Nigeria. The processing method, resource inputs and problems encountered are described. Results show that an estimated gross margin per tonne of about ?4050* and a net processing margin (profit) of about ?3811 are realizable from the venture. A break-even analysis shows that at an average price per tonne of ?7000, ?8000 and ?9000, the break-even outputs (and sales) are 9.8, 6.8 and 5.3 t, respectively. The implications of these findings for research and development, and promotion of small-scale yam-based industries in Nigeria are discussed.