OBJECTIVES: To evaluate the cost-effectiveness of alternative renal screening strategies and implications for blood pressure treatment in patients with type 1 diabetes. This required development of a discrete time simulation model for type 1 diabetes patients to estimate quality-adjusted life years (QALYs). METHODS: We synthesized evidence on type 1 diabetes patients using several published sources. The simulation model was based on eleven equations to estimate transitions between health states. Screening identified patients with impaired renal function whom were then assigned angiotensin-converting enzyme inhibitors (ACE-I) to lower blood pressure and improve renal function. Screening intervals were varied from 1 year to 10 yearly intervals and compared to current UK guidelines of annual screening. Outcomes were expressed in QALYs based on utilities of different diabetes complications obtained from a meta-analysis. Costs of the monitoring program, treatment and hospitalisation from diabetes-related complications were included. 1000 patients (mean age 15 years) were simulated for 85 years and cost-effectiveness analyses performed. Costs and effects were discounted at standard rates. Uncertainty surrounding these results was also calculated. RESULTS:  When comparing annual screening to biennial screening, the reduction in the number of patients on ACE-I reduces both costs and QALYs, showing an incremental cost-effectiveness (ICER) ratio of £9,718 per QALY. Increasing the screening interval to 5 years resulted in further reductions in both costs and QALYs, and an ICER well within the National Institute of Health and Clinical Excellence’s (NICE) recommended threshold. Sensitivity analyses showed universal treatment increased survival rates when compared to annual screening and no treatment by an additional 4.4 and 5.5 years, respectively. CONCLUSIONS: Renal screening for people with type 1 diabetes is cost-effective in the UK context compared to other funded health interventions. Further research is required to determine whether universal treatment is a policy that is worth pursuing in the long term.