Objective: To assess the incremental cost-effectiveness of combining tiotropium (TIO) with salmeterol (SAL) or salmeterol-fluticasone (SFC) in moderate to severe COPD compared with TIO alone. Methods: A Markov model was constructed to estimate the incremental quality-adjusted life-years (QALYs) of the three treatment arms. Efficacy data were obtained from a recently published large randomized controlled study (Canadian Optimal Therapy of COPD trial). Cost data were obtained from publicly available data. The cycle length for the model was set to 3 months and the maximum time horizon was set to 3 years. The cost-effective analysis was conducted from a third-party payer's perspective in the US health care system. Future costs and effects were discounted at 3%. All costs are reported in 2007 dollars. Multiple one-way sensitivity analyses and a Monte Carlo simulation were performed to handle uncertainty. Results: Incremental cost-effectiveness ratios compared with TIO alone were $152,743/QALY in the TIO+SAL group, and $51,610/QALY in the TIO+SFC group. An acceptability curve revealed TIO+SAL was more cost-effective when a willingness to pay (WTP) was $33,000/QALY or less and TIO+SFC was more cost-effective when a WTP exceeded that threshold. The cost-effectiveness was also sensitive to changes in several variables including the mortality rates and utilities associated with TIO+SAL and TIO+SFC, as well as the hospitalization rate associated with TIO+SAL. Conclusion: When monotherapy with TIO is not effective to control moderate to severe COPD, adding SFC rather than SAL appears to be a more reasonable approach from a cost-effectiveness standpoint in the US health care system. However, the results were sensitive to changes in several key variables.