OBJECTIVES: Perform a cost-effectiveness analysis to evaluate laparoscopic roux-en-y gastric bypass(LRYGB) and banding procedures(LAGB) against each other and no treatment. METHODS: A backwards induction cost-effectiveness model was utilized and analysis was conducted from a societal perspective. Lifetime costs and life expectancies for LRYGB, LAGB morbidly obese patients were compared to those on no treatment and to each other. Efficacy and probabilities estimates were obtained from a literature review. Costs and quality-adjusted life years(QALYs) were discounted by a 3% annual rate, and costs are reported in 2011 US dollars. A one-way sensitivity analyses was done to assess the model’s robustness. RESULTS: LRYGB had the greatest lifetime costs at every age ($13,506 vs. no treatment, $3,859 vs. LAGB), but also the greatest amount of QALYs gained (2.54 more vs. no treatment, 1.32 vs. LAGB), leading to a lower ICER than LAGB when compared with no treatment ($5,324 and $7943/QALY, respectively). When LRYGB was compared to LAGB, a relatively low ICER of $2,918/QALY resulted at age 40. ICERs in both comparisons increased steadily with age. In one-way sensitivity analyses for LRYGB against no treatment, the most sensitive parameters were medical costs associated with initial baseline BMI (ICER varied ~187%), and medical costs associated with LRYGB efficacy (~80%). The results of LAGB against no treatment were similar, although utility associated with efficacy was much more sensitive in comparison. In results for LRYGB versus LAGB, the model was most sensitive to recurring medical cost parameters associated with efficacy of treatment. CONCLUSIONS: Both LRYGB and LAGB were found to be cost-effective compared to no treatment for morbidly obese people, with ICERs below $25,000 up to age sixty. These results were robust to reasonable model parameter changes.  This study also suggests that LRYGB may be more cost-effective than LAGB due to the relative improvement in QALYs gained.