OBJECTIVES: In previously untreated adults with hepatitis C virus (HCV) genotype 1 infection the combination of boceprevir plus peginterferon alfa/ribavirin (BPR) has been shown to produce a higher rate of sustained virological response (SVR) than peginterferon alfa/ribavirin (PR). The aim of this study is to assess the cost effectiveness of this improved efficacy.   METHODS: We developed a Markov model to describe the clinical history of CHC in which HCV genotype 1 patients receives PR for 4 weeks and subsequently one cohort (A) receives PR for 44 weeks and another cohort (B) receives BPR for 24 weeks and, in this cohort (B), those patients with a detectable HCV RNA level between weeks 8 and 24 receives PR for an additional 20 weeks. All patients are followed for their expected lifetime. The reference patient is 30-year-old with CHC without cirrhosis. The SVRs to BPR and PR cohorts came from SPRINT 2 study. Quality of life for each health state was based on literature. Costs for each health state were based on three Delphi panels, one with hepatologists, one with intensivists and another with oncologists. Costs in 2011 Brazilian Reais and benefits were discounted at 3%.  RESULTS: BPR increases life expectancy by 2.07 years and quality adjusted life years (QALY) by 3.15 years compared to PR. The incremental cost per life year gained is 11.394 Brazilian Reais and the incremental cost per QALY is 7.494 Brazilian Reais.    CONCLUSIONS: In Brazil, boceprevir plus peginterferon alfa/ribavirin is a cost-effective therapy, for treatment of previously untreated adults with HCV genotype 1 compared with peginterferon alfa/ribavirin.