OBJECTIVES: Smoking causes serious public health problems in Hong Kong. Effective smoking cessation strategies are required in order to cut public health budgets and save lives. The aim of this study is to estimate the cost effectiveness of a new smoking-cessation agent  varenicline compared with the traditional strategies including bupropion, nicotine replacement treatment (NRT) and unaided cessation in Hong Kong. METHODS: A previously published Markov state-transition projection model was employed to estimate the life-long costs and effects of smoking cessation using varenicline, bupropion, NRT and unaided cessation from a societal perspective. Based on local epidemiology, a cohort of adult smokers was assumed to have a one-time quit attempt and was grouped by their genders and ages. Management costs and utilities of five smoking related diseases including chronic obstructive pulmonary disease (COPD), lung cancer, coronary heart disease (CHD), stroke and asthma were studied. The participants of each group experienced different transition probabilities based on their age and disease-specific morbidity and mortality rates. Vital statistics, disease-related morbidity and mortality rates were obtained from government statistics. Outcomes of the study in terms of benefits and costs were discounted at 5% after the first year of the study. Probabilistic sensitivity analysis was performed to assess the impact on the model outputs of uncertainty in certain model parameters including efficacies of the smoking cessation strategies, morbidity costs and morbidity utilities. RESULTS: Varenicline dominated among all the strategies with -HKD106,573 (-US$13,663, HKD7.8=USD1)/QALY  when compared with bupropion; -HKD246,042  (-US$31,544)/QALY with NRT and -HKD41,426 (-US$5,311)/ QALY with unaided cessation. The probabilities of varenicline being cost-effective were 77.9% when compared with bupropion, 69.3% with NRT and 88.3% with unaided cessation, at a willingness to pay of HKD50,000 (US$6410)/QALY. CONCLUSIONS: From the current study, varenicline appears to be a cost-effective smoking-cessation strategy when compared with the other existing strategies in Hong Kong.