OBJECTIVES: Breast magnetic resonance imaging (MRI) is a sensitive method of breast screening and is increasingly being used for detection of breast cancer among high risk young women. However, the specificity of breast MRI is relatively low and costs are quite high. The purpose of this study was to determine if breast MRI is a cost-effective approach for the detection of breast cancer among young women at high risk. METHODS: A Markov model was built up to compare annual breast cancer screening  with either breast MRI or mammography among young women who have more than 15% lifetime risk of breast cancer. Data from published studies provided probabilities for the model inputs. All costs and benefits were discounted at 5% per year. The analysis was performed from societal perspective with results reported in 2013 U.S. dollars. One-way and net benefits sensitivity analyses addressed uncertainty in model parameters. RESULTS: Breast MRI provided 19.38 discounted quality-adjusted life-years (QALYs) at a discounted cost of $37,765 while mammography provided 19.14 QALYs at a cost of $23,226 over 30 years of screening. The incremental cost-effectiveness ratio of breast MRI compared to mammography was $59547/QALY. In one-way sensitivity analysis and net benefits sensitivity analysis, the cost-effectiveness or net benefits of MRI screening depends critically on the accuracy of both MRI and mammography. CONCLUSIONS: Annual MRI screening of women who have more than 15% lifetime risk of breast cancer was found to be potentially cost-effective, with an ICER of $59547/QALY when compared to annual mammography alone. The benefits of early detection of breast cancer with MRI in this population may outweigh the added cost of screening and the higher risk of false positives. However, the cost-effectiveness of MRI screening is highly dependent on the accuracy of MRI and Mammography. There remains some statistical uncertainty around this result.