Malaria imposes a substantial global disease burden. It disproportionately affects sub-Saharan Africans, particularly young children. In an effort to improve disease management, the World Health Organization (WHO) recommended in 2010 that countries test children younger than age five who present with suspected malaria fever to confirm the diagnosis instead of treating them presumptively with antimalarial drugs. Costs and concerns about the overall health impact of such diagnostic testing for malaria in children remain barriers to full implementation. Using data from national Malaria Indicator Surveys, we estimated two-stage microsimulation models for Angola, Tanzania, and Uganda to assess the policy’s cost-effectiveness. We found that diagnostic testing for malaria in children younger than five is cost-saving in Angola. In Tanzania and Uganda the cost per life-year gained is $5.54 and $94.28, respectively. The costs projected for Tanzania and Uganda are less than the WHO standard of $150 per life-year gained. Our results were robust under varying assumptions about cost, prevalence of malaria, and behavior, and they strongly suggest the pursuit of policies that facilitate full implementation of testing for malaria in children younger than five.