In an 18-month study of malaria in a population of 1,875 residents in 423 houses in an endemic area in southern Sri Lanka, the risk of malaria was found to be 2.5-fold higher in residents of poorly constructed houses than in those living in houses of good construction type. In residents of poorly constructed houses but not in others, the risk was even greater when the house was located near a source of water that could act as a potential breeding place for malaria vector mosquitoes (P = 0.0001). Based on previous findings that confirmed that house construction type was itself a risk determinant, and not merely a marker of other behavioral factors, we have estimated the potential impact of two feasible interventions to reduce the risk of malaria: 1) the imposition of a buffer zone of 200 meters around bodies of water from which houses of poor construction were excluded, which was estimated to lead to a 21% reduction of the malaria incidence in the overall population and a 43% reduction in the relocated community; and 2) the conversion of houses of poor construction type located in the buffer zone to those of a good construction type, which was estimated to lead to a 36% reduction in the incidence rates in the whole population and a 76% reduction in the residents of houses whose construction type was improved. Taking into consideration the cost to the Government of malaria prevention, we estimated the worth of a Government's investment in improving house construction type. The investment in housing was estimated to be offset in 7.2 years by savings to the Government on malaria costs alone, and beyond this period, to bring a return on the Government's investment by way of savings to the malaria control program.