OBJECTIVES: Extended 7-year follow-up of the US Oncology Adjuvant Trial 9735 demonstrated that TC (docetaxel 75 mg/m2 plus cyclophosphamide 600 mg/ m2 every 21 days for 4 cycles) significantly improves disease-free survival (DFS) and overall survival (OS) compared to AC (doxorubicin 60 mg/m2 plus cyclophosphamide 600 mg/ m2 every 21 days for 4 cycles) as adjuvant treatment of operable invasive breast cancer.  Cost-effectiveness analyses of TC versus AC were conducted from a US and Canadian payer perspective, based on data from Trial 9735. METHODS: A Markov model was developed to estimate incremental cost per life year gained and quality-adjusted life year (QALY) gained over a lifetime horizon.  Monthly survival and risk of disease recurrence were estimated for up to 7 years using OS and DFS from Trial 9735.  Survival was extrapolated to lifetime using estimates of general population life expectancy, assuming no treatment benefit beyond the trial period.  Country-specific resource utilization and unit costs were applied to estimate costs (in 2008 dollars) for chemotherapy administration, chemotherapy-related toxicities, recurrence and adverse events.  Utility weights used in the calculation of QALYs were derived from the literature. RESULTS: For the US analysis, the lifetime cost per life year gained (TC vs. AC) was US$6261 and cost per QALY gained was US$7905 (3% annual discount rate).  For the Canadian analysis, the lifetime cost per life year gained was CAN$6842 and cost per QALY gained was CAN$8251 (5% annual discount rate).  The results were robust across a range of sensitivity analyses.  CONCLUSIONS: In patients with operable invasive breast cancer, adjuvant treatment with TC provides gains in terms of life years and QALYs compared to AC and results in very favourable cost-effectiveness ratios.  TC is a clinically and economically attractive alternative to AC for patients receiving adjuvant chemotherapy for operable breast cancer in North America.