OBJECTIVES: To estimate the cost-utility of vildagliptin in the treatment of diabetes mellitus type 2, in combination with metformin, compared to the standard strategy of treatment in Poland: combination of metformin and sulphonylure. METHODS: The cost-utility analysis is based on Markov decision model (package Tree Age Pro 2008). The following strategies of treatment were compared: vildagliptin (50 mg twice daily) versus glimepiride (mean dose 4,5 mg/day) both added to metformin (mean dose 1892 mg/day). Direct medical costs were considered: cost of oral antidiabetic drugs (OAD), cost of insulin, additional costs of treatment of type 2 diabetes (e.g. test strips, lancets), cost of general practitioner, cost of specialist visits, cost of complications of type 2 diabetes mellitus treatment. Polish cost data was used. The units of effectiveness in the analysis were quality adjusted life years (QALY) and life years gained (LYG). The outcome of the analysis was incremental cost-effectiveness ratio (ICER), which presents the cost of gaining one additional unit of QALY or LYG in the case of using the therapy with vildagliptin instead of the comparator. Data concerning clinical effectiveness of compared interventions and also of other strategies of treatment (used after OAD treatment) were taken from RCT studies, long term studies and systematic reviews. The target population consisted of adult patients with diagnosed diabetes mellitus type 2, inadequately controlled with metformin in monotherapy. Both payer’s perspective (National Health Fund and patient) and a lifelong time horizon were assumed in the analysis. RESULTS: Cost of gaining one additional unit of QALY and one additional unit of LYG in the case of using combination therapy vildagliptin+metformin instead of therapy glimepiride+metformin is 58,483 PLN and 589,575 PLN, respectively. CONCLUSIONS: Assuming the Polish acceptable threshold which is 91,914 PLN, treatment with combination of vildagliptin and metformin is cost-effective.