OBJECTIVES: A regimen including nevirapine (NVP) is often the predominant antiretroviral therapy (ART) available for children infected with human immunodeficiency virus (HIV) in Africa, because it is inexpensive, stable at high temperatures, and used as a single dose for the prevention of mother-to-child transmission (PMTCT) of HIV.  Despite the benefits of NVP, challenges exist from the effect of NVP resistance in children who become infected with HIV regardless of prophylaxis. As a result of these concerns, ritonavir-boosted lopinavir (LPV/r) based regimens, although more expensive, are preferred by some clinicians over the less costly NVP-based regimens. We therefore evaluated the cost-effectiveness of NVP-based regimens to LPV/r-based regimens as a first-line treatment option for children with HIV after virologic suppression. METHODS: A Markov Model was designed to compare the cost-effectiveness of NVP-based regimens to LPV/r-based regimens for HIV-infected children with three HIV transition states, CD4% >15, CD4% <15, and death. The clinical and costs data were collected from published studies of ART for children in South Africa and based on time horizons of one year and lifetime. RESULTS: The resultant Incremental Cost Effectiveness Ratio (ICER) from this study demonstrates that the NVP based strategy is cost effective, with the incremental cost and the incremental QALY of the time horizon of one-year and lifetime of, $690.15/0.92QALY and $22,578.25/30.27QALY respectively. CONCLUSIONS: For HIV infected children with a history of exposure to single dose NVP (sdNVP) from PMTCT prophylaxis, it is cost-effective to switch to NVP-based regimens as a first-line treatment option after virologic suppression with LPV/r based HAART.