OBJECTIVES: Systematic transrectal ultrasound-guided biopsy (TRUSGB) has raised concerns regarding the overdiagnosis of prostate cancer (PCa). Magnetic resonance imaging followed by magnetic resonance-guided targeted biopsy (MRI-MRGB) is gaining more popularity. Evaluation that simultaneously considers cancer outcomes, healthcare costs and quality-of-life is needed to further inform decision making in the US population. METHODS: A decision-analytic Markov model with a lifetime horizon of 10 years was developed to evaluate diagnostic accuracy, long-term health outcomes, costs, and quality-of-life of the two strategies (i.e., MRI-MRGB versus TRUSGB) in men with elevated prostate-specific antigen ((>4 ng/ml). Probabilities of clinical events were obtained from published literature. Direct medical costs included diagnostic and treatment-related healthcare costs. Costs were inflated to 2015 US dollars and discounted at an annual rate of 3%. Quality-adjusted life years (QALYs) were derived from published literature and expert opinions. We calculated the incremental cost-effectiveness ratio (ICER), which was equal to the difference in costs of two interventions divided by the difference in QALYs. Sensitivity analyses were performed to assess uncertainty. RESULTS: The MRI-MRGB strategy yielded lower total costs (US 5,358 versus 6,372) and higher total QALYs (7.21 versus 7.19) than TRUSGB. Therefore, TRUSGB was dominated by the MRI-MRGB strategy. The results were robust with the sensitivity analyses. CONCLUSIONS: The MRI-MRGB strategy generated lower total costs but higher QALYs than the TRUSGB strategy. Therefore, MRI-MRGB was the optimal choice that provided the greatest health benefits for the diagnosis of men with suspected PCa in the US population.