This paper considers the problem of output-feedback guaranteed cost controller design for uncertain time-delay systems. By representing the time-delay system in the descriptor form and using a recent result on bounding of cross products of vectors, we obtain new delay-dependent sufficient conditions for the existence of the guaranteed cost output-feedback controller in terms of matrix inequalities. A numerical algorithm is proposed to construct a full order output feedback controller achieving a suboptimal guaranteed cost such that the system can be stabilized for all admissible uncertainties. An example is presented which shows that the proposed method can produce a lower guaranteed cost than the delay-independent method. (C) 2004 Elsevier Ltd. All rights reserved.