Objective: To estimate the cost-utility of interferon beta-1b (IFNB-1b) in the treatment of patients with a clinically isolated syndrome (CIS) suggestive of multiple sclerosis (MS). Methods: We developed a Markov model of the epidemiology and treatment of CIS and MS. The model allows users to simulate outcomes over varying time horizons. A hypothetical cohort of 1000 patients with incident CIS was specified, with initial health states defined by Kurtzke Expanded Disability Symptom Scale (EDSS). The cohort was assumed alternatively to be treated with IFNB-1b (250mg eod) following an initial demyelinating event suggestive of MS or not treated until confirmation of MS. Data from a published clinical study (BENEFIT) were used to model EDSS progression over time and transitions from CIS to MS. Relapses were estimated from BENEFIT and published natural history data. Following transition to MS, all patients were assumed to be treated with IFNB-1b until EDSS 6.5. Direct and indirect costs of MS treatment and IFNB-1b were estimated from published literature and pricing schedules. Patient utilities were derived from EQ-5D data from BENEFIT, supplemented by published data defined by EDSS score and relapse occurrence. Mortality was estimated using life tables and EDSS data. Costs (2007 currency) and outcomes were discounted at 5% per annum. Sensitivity analyses were performed on key model parameters. Results: Use of IFNB-1b was associated with slower EDSS progression (hence, longer time to MS diagnosis), and reduced relapse burden. In the base case (Australian perspective; 25-year simulation), incremental cost-utility of IFNB-1b versus no treatment was AUD58,600 (USD$51,400) per quality-adjusted life year (QALY) gained. Findings were sensitive to years simulated, IFNB-1b cost and treatment effect, and underlying rate of disease progression. Conclusion: IFNB-1b treatment of patients with CIS apparently offers reasonable value for money relative to many well-accepted health care interventions.