OBJECTIVES: The objective of this study was to estimate the cost-effectiveness of Aromatase Inhibitors (AIs) (anastrozole, letrozole and exemastane) and tamoxifen as adjuvant treatment of postmenopausal women with hormone receptor positive early breast cancer. METHODS: A Markov model comprising of five health states (on treatment, local recurrence, distant cancer, die due to breast cancer and die due to other causes) was developed to estimate the incremental cost per quality adjusted life-year (QALY) gained for anastrozole, letrozole, exemestane and tamoxifen. The analysis was carried out from a third party payer perspective. Transition probabilities were estimated based on randomized clinical trials. Drug costs, health utilities, and direct and indirect costs were obtained from published literature. The time horizon used was 25 years for the hypothetical cohort of 1000 postmenopausal women with hormone receptor positive breast cancer. Costs and QALY were discounted by 5% annually. Sensitivity analyses were performed by varying the values of key parameters, QALY and costs. RESULTS: Under base case assumptions, more QALYs per patient would be gained with letrozole (4.6) than with anastrozole (3.6), exemestane (3.6) and tamoxifen (3.3). The cost of gaining one QALY with letrozole was $42,307 compared with exemestane ($71,081), tamoxifen ($76,826) and anastrozole ($ 78,114). The estimated ICER of letrozole, exemestane and anastrozole compared with tamoxifen was -$47,560, $9,828 and $93,513 respectively. These results were robust to the two-way sensitivity analyses performed. CONCLUSIONS: In our analysis, letrozole was the cost-effective treatment compared to anastrozole, exemestane and tamoxifen for the primary adjuvant treatment postmenopausal women with hormone receptor positive early-stage breast cancer. Instead of comparing only monotherapy for cost-effectiveness, future research should consider combination therapy while allowing switching between drugs.