Rationale, aims, and objectives An inefficient health system wastes scarce resources even if it makes considerable gains in accountability and equity. Such a system is expected to perform better. Therefore, it is vital to examine the current performance of health systems and their constituents as well as assess how to reach their full potential. The aim of this study was to evaluate the technical and economic efficiency of medical diagnostic laboratories in hospitals affiliated with Urmia Medical Sciences University (UMSU) in 2016. Methods In this descriptive-analytical study, the data of all diagnostic laboratories of the hospitals of UMSU were inputted into Frontier 4.1 software after taking the logarithm. Then, the technical and economic efficiency of the laboratories were obtained by estimating the production and cost function using the stochastic frontier analysis method, assuming input minimization for 2016. Results The average technical and economic efficiency of the diagnostic laboratories was obtained as 0.931±0.34 and 0.519±0.33, respectively. These laboratories must reduce their inputs and costs to achieve full efficiency without changing the amount of their output. Conclusion Although the average economic efficiency of the diagnostic laboratories of the studied hospitals was high, there is still an increase in the efficiency of these units given the cost of inputs at the time of allocating resources. In addition, it is possible to improve the technical efficiency of the clinical laboratories of hospitals affiliated with UMSU by 48.1% by applying the same level of inputs and without increasing the costs.