OBJECTIVES: To evaluate the cost-effectiveness of bariatric surgery in obese Korean people. METHODS: The target population was obesity patients defined as having a body mass index (BMI) of BMI≥30kg/m2  with diabetes. This study performed in Healthcare system perspectives. The bariatric surgery comprised laparoscopic adjustable gastric banding (LAGB), Roux-en Y gastric bypass (RYGB), and Sleeve gastrectomy (SG). The comparison, non-surgical treatments consisted of physician visit, exercise, diet, and pharmacotherapy. For cost-effectiveness analysis, the decision model with a one year time horizon was used. The effectiveness associated with percent weight change from baseline, BMI reduction, and proportion of patients with more than 10% weight change. The cost data was collected from the survey of 9 medical centers who had conducted these obesity treatments and Korean national health insurance statistics, based on 2011 costs. The effectiveness data and distribution of surgery and complication was collected from 7 multi-center, 485 patients retrospective chart review. Incremental cost-effectiveness ratio (ICER) of bariatric surgery compared to non-surgery interventions was calculated in obese people. Subgroup analysis using various BMI level with/without diabetes and probability sensitivity analysis were conducted to assess the stability of base-case results. RESULTS: The bariatric surgery had higher cost (US$9273) and better effectiveness(18.1% weight loss), the Incremental cost-effectiveness ratio (ICER) was US$512 per one-percent weight loss. Through the subgroup and sensitivity analysis under various conditions, robustness of the study results was also demonstrated. CONCLUSIONS: The cost-effectiveness study for clinical outcomes indicated that bariatric surgery was clinical and cost effective alternative to conventional therapy in obese patients.