OBJECTIVES: One third of children and adolescents in the United States are overweight and over 18% are obese. Childhood obesity has been associated with increased morbidity in childhood and frequent tracking into adulthood. Weight-loss surgery has recently become an accepted treatment for severe adolescent obesity. We have constructed a microsimulation to quantify potential savings in lifetime (age 18 to 80) medical costs after obese adolescents undergo Roux-en-Y gastric bypass surgery.    METHODS: Published literature and data from the 2004 – 2010 rounds of the Medical Expenditure Panel Survey (MEPS) were used to inform health state costs and transition probabilities. Surgical complication rates are included and the costs of these complications are estimated using Medicare reimbursement rates and the AHRQ HCUP National Inpatient Sample Query Tool.   RESULTS: The costs of complications ranged from $120 to $16,900, but the complications only occurred in 0.2% to 1.3% of patients. Without the cost of the initial procedure, we find the present value (discounted 3% annually) of reductions in lifetime medical expenditures for an 18 year-old male with a BMI of ≥ 40 to be between $19,535 and $13,073, if his post-operative BMI is between 25 and 30, respectively. The present values of these savings for females are between $20,446 and $13,851. All of these savings are statistically greater than zero (P < 0.001). However, because the prevalence of extremely high BMI is rare, the costs assigned to individuals with BMI ≥ 40 are most representative of individuals with a BMI near 40. Savings from the treatment of more extreme obesity are likely greater.   CONCLUSIONS: Given that the cost of Roux-en-Y gastric bypass surgery for adults can range from $20,000 to $30,000, our results indicate that this surgery is likely not cost-saving for the majority of obese adolescents.  However, the procedure may still be cost-effective, depending on quality-of-life improvements.