OBJECTIVES:   Induction therapy is administered at the time of kidney transplantation to prevent acute rejections.  The agent of choice depends on the degree of patient risk for acute rejection.  In the US, rabbit anti-thymocyte globulin (rATG) is the standard agent administered to high-risk patients.  A monoclonal antibody approved for use in chronic lymphocytic leukemia—alemtuzumab—has been shown in off-label use to be equally safe and efficacious as rATG in these patients.  Furthermore, alemtuzumab costs less, making it a potentially cost-effective alternative.  Nevertheless, practitioners have been slow to adopt alemtuzumab as an induction agent of choice due to concerns that it may be less effective than rATG in improving patient survival in the long-term. The objective of this study is to the project the incremental cost-effectiveness ratio (ICER) of alemtuzumab versus rATG in high-risk patients.   METHODS:   A decision-analytic model was constructed to model costs and outcomes specific to the first 12 months post-transplantation, such as for delayed graft function and acute rejection; long-term (30-year) outcomes were estimated with a Markov model with outcomes measured in life years (LYs) and quality-adjusted life years (QALYs). Clinical probabilities were obtained from randomized controlled trials; preference weights from direct patient measures in previously published literature; and costs from previously published cost-effectiveness studies on kidney transplantation. RESULTS: In the base case, alemtuzumab was projected to yield 1.18 LYs and 1.09 QALYs gained when compared with rATG.  The estimated ICER of alemtuzumab compared to rATG was $5,368 per QALY.  Sensitivity analysis revealed that the ICER was most sensitive to the transition probabilities to graft loss and death.  Despite these variations, alemtuzumab was cost-effective across all parameter ranges, with the greatest ICER being $21,133.   CONCLUSIONS:   In kidney transplant patients at high risk of acute rejection, our model suggests that alemtuzumab is likely to be cost-effective, yielding an ICER below often-cited thresholds.