OBJECTIVES: The objective of the study was to evaluate the cost-effectiveness of  peginterferon alfa-2a compared to entecavir for the treatment of HBeAg-positive chronic hepatitis B in China. METHODS:  A Markov health-state model was designed to estimate the direct medical costs and outcomes (life year gained and QALY) of treating HBeAg-positive chronic hepatitis B in China. The model included 11 health states – Chronic hepatitis B (CHB), HBeAg seroconversion, HBsAg loss, CHB with resistance, Flare due to resistance, Compensated cirrhosis, Decompensated cirrhosis, Hepatocellular carcinoma, Liver transplant, Post-liver transplant and death. The evolution of a cohort of HBeAg-positive CHB patients was simulated along 80 years with yearly cycles. The clinical and quality of life data were obtained from published literature. From the perspective of Chinese health insurance system, cost data was calculated based on the published literature about  economic burden of chronic hepatitis B. A discounting rate at 3% was used to discount medical costs happened at different years. A univariate sensitivity analysis was performed to understand the key drivers and general sensitivity of the model. RESULTS: The model results showed that the utilization of peginterferon alfa-2a treatment for HBeAg-positive CHB can prolong 0.672 QALYs, compared to the entecavir treatment. The total cost per patient treated with peginterferon alfa-2a was US$28,093, and US$25,768 for patient treated with entecavir. The discounted incremental cost per QALY gained for pegainterferon alfa-2a treatment was US$3,461. CONCLUSIONS: The results of the model suggest that pegainterferon alfa-2a improves health outcomes in a cost-effective manner compared with entecavir in the treatment of HBeAg-positive chronic hepatitis B in China.