OBJECTIVES: The majority of individuals with chronic hepatitis C virus (HCV) are adults, and there is much experience in Australia with interferon-based treatments in adults using combination pegylated- interferon and ribavirin treatment. Pegylated-interferon alfa-2b was first approved for adult use in Australia and for reimbursement in 2003. It is currently reimbursed for initial treatment, and for a single retreatment course. Nonetheless, a limited number of children and adolescents in Australia contract the disease. Currently these individuals have no registered or reimbursed approved therapies available to them. This analysis reports a cost-effectiveness analysis of a single course of initial pegylated-interferon alfa-2b therapy in paediatrics with a bodyweight of at least 27 kg, reflecting the lowest dosage that will be supplied in Australia. METHODS: A cost-utility analysis was conducted using a lifetime Markov model. Analysis of paediatric treatment versus no treatment was undertaken to determine the impact expansion of reimbursement would have on the cost-effectiveness of the total population. Data were sourced from a study assessing sustained virological response, and the literature reporting the natural history and utility weights regarding HCV.  RESULTS: Downstream cost-offsets associated with treatment reduce the total incremental cost from AU$13,208 to AU$4767. These cost-offsets arose from avoidance of downstream transitions to more severe and costly states of health. Treatment was also shown to be associated with improvements in health-related quality of life due to the downstream avoidance of more serious health states as well as the obvious improvement in viral clearance. Over the lifetime of a patient, the base case analysis estimated an improvement of approximately 2.01 QALYs, generating an incremental cost-effectiveness ratio of AU$2373 per QALY. CONCLUSIONS: Expanding reimbursement to include paediatric treatment of chronic HCV is a highly cost-effective way to equitably treat chronic HCV, regardless of age.