OBJECTIVES: This study assesses whether pegylated interferon and ribavirin is cost-effective compared with no antiviral treatment provided in routine clinical practice, for different patient subgroups. METHODS: The cost-effectiveness analysis (CEA) uses a Markov decision model to estimate the lifetime cost per quality-adjusted life-year (QALY) of antiviral treatment compared with no treatment. The model is populated with data on sustained virological responses, costs, and transition probabilities all taken from a large representative sample of UK cases and centers (Trent HCV database). RESULTS: The CEA found that pegylated interferon and ribavirin was cost-effective for most patient subgroups. The CEA found that for patients with genotype non-1, the intervention led to cost reductions and gains of at least 0.5 QALYs. For genotype 1 cases with mild or moderate disease, and younger cirrhotic patients (aged 40 or less), costs per QALY remained below 20,000 pound sterling ($40,000 or 29,000 euro). For genotype 1 cases with cirrhosis aged 50, the mean cost per QALY rose to over 60,000 pound sterling ($120,000 or 87,000 euro). CONCLUSIONS: The study concludes that, based on cost and effectiveness data collected from routine clinical practice, treatment with pegylated interferon and ribavirin is generally cost-effective. The study shows that there are variations according to patient subgroup and for older (aged 50 or over) genotype 1 patients with cirrhosis, antiviral treatment appears less cost-effective.