OBJECTIVES To evaluate the relative costs and benefits, from a payer perspective, between live attenuated influenza vaccine, trivalent (LAIV) and trivalent inactivated influenza vaccine (TIV) for eligible children 24-59 months of age. METHODS We conducted a payer perspective, cost consequence analysis of LAIV compared to TIV, using patient-level data from a head-to-head randomized control trial (RCT) supplemented with cost data from published literature and health claims analysis. Model outcomes included total direct costs to payers and cases of influenza avoided for a single influenza season. Vaccine related costs included average payer reimbursement for vaccine, administration costs, and related adverse events. Cost related to breakthrough cases of influenza were also considered. Vaccine dosage and percentage of vaccine naïve children receiving two doses (69.4%) were assumed to mirror the RCT. All costs were reported in 2008 US dollars. Sensitivity analyses (SA) were run. RESULTS Due in part to the higher estimated efficacy among young children (54% fewer influenza cases), LAIV had lower total direct costs per child ($83.75) compared to TIV ($92.00). Based on this model, use of LAIV is estimated to result in a cost savings of $8.26 per vaccinated child (95% CI:$3.09-$13.39 savings). For every 100,000 children vaccinated, there were an estimated 5,572 fewer cases of influenza among children receiving LAIV. Despite LAIV's higher per dose cost ($23.81 vs $14.14 per dose), LAIV lowered overall health care utilization and resulted in a net cost savings. The SA found that difference in vaccine acquisition and administration prices, difference in vaccine efficacy, the proportion of children receiving two doses, and costs of hospitalization for influenza were influential parameters in the model. CONCLUSIONS The payer specific analysis shows that compared to vaccinating with TIV, LAIV may lower costs and help reduce influenza cases in eligible children aged 24 to 59 months.