BACKGROUND: The most recent World Health Organization (WHO) antiretroviral treatment guidelines recommend the inclusion of zidovudine (ZDV) or tenofovir (TDF) in first-line therapy. We conducted a cost-effectiveness analysis with emphasis on emerging patterns of drug resistance upon treatment failure and their impact on second-line therapy. METHODS: We used a stochastic simulation of a generalized HIV-1 epidemic in sub-Saharan Africa to compare two strategies for first-line combination antiretroviral treatment including lamivudine, nevirapine and either ZDV or TDF. Model input parameters were derived from literature and, for the simulation of resistance pathways, estimated from drug resistance data obtained after first-line treatment failure in settings without virological monitoring. Treatment failure and cost effectiveness were determined based on WHO definitions. Two scenarios with optimistic (no emergence; base) and pessimistic (extensive emergence) assumptions regarding occurrence of multidrug resistance patterns were tested. RESULTS: In the base scenario, cumulative proportions of treatment failure according to WHO criteria were higher among first-line ZDV users (median after six years 36% [95% simulation interval 32%; 39%]) compared with first-line TDF users (31% [29%; 33%]). Consequently, a higher proportion initiated second-line therapy (including lamivudine, boosted protease inhibitors and either ZDV or TDF) in the first-line ZDV user group 34% [31%; 37%] relative to first-line TDF users (30% [27%; 32%]). At the time of second-line initiation, a higher proportion (16%) of first-line ZDV users harboured TDF-resistant HIV compared with ZDV-resistant viruses among first-line TDF users (0% and 6% in base and pessimistic scenarios, respectively). In the base scenario, the incremental cost effectiveness ratio with respect to quality adjusted life years (QALY) was US$83 when TDF instead of ZDV was used in first-line therapy (pessimistic scenario: US$ 315), which was below the WHO threshold for high cost effectiveness (US$ 2154). CONCLUSIONS: Using TDF instead of ZDV in first-line treatment in resource-limited settings is very cost-effective and likely to better preserve future treatment options in absence of virological monitoring.