OBJECTIVES: The Brazilian protocol recommends that the first line treatment for patients with chronic hepatitis C (CHC) and genotype 2 or 3 is interferon alfa (IFN) plus ribavirin for 24 weeks. For those that do not respond to this treatment the use of peginterferon alfa (PEG) plus ribavirin for 48 weeks is recommended. Our objective was to compare the cost and effectiveness of first line treatment of genotype 2 or 3 with peginterferon with the current Brazilian protocol. METHODS: Target Population: CHC patients with genotype 2 or 3 in Brazil. Interventions: PEG-SEC: interferon alfa (IFN) plus ribavirin (RBV) for 24 weeks for patients with genotype 2/3; for nonresponders subsequently peginterferon (PEG) plus RBV for 48 weeks; PEG-FIRST: PEG+RBV for 48 weeks for all patients. Study Type: Cost-effectiveness analysis. Data Sources: Effectiveness data from a meta-analysis conducted with Brazilian studies. Treatment cost for antiviral drugs, secondary drugs, diagnostic tests, outpatient visits to physicians and other professionals, hospitalizations, nurse and pharmaceutical care from a micro-costing study converted to 2010 USD. Perspective: Health care system. Outcome Measure: Sustained Viral Response (SVR), direct costs and incremental cost effectiveness ratio (ICER). RESULTS: With a SVR rate of 76.6% and costs of USD 6,943, PEG-SEC was more effective and less costly than PEG-FIRST (SVR: 73.2%, costs: USD 11,297). Sensitivity analyses: For PEG-SEC to remain dominant, the proportion of patients undergoing second line treatment with PEG+RBV must be >88%. If only 0.5% of patients undergo second line treatment with PEG+RBV, the ICER of PEG-FIRST is USD 71,529 per additional SVR. CONCLUSIONS: In the Brazilian context, IFN for genotype 2 or 3 as first line, and PEG+RBV for those who fail to achieve SVR is more effective and less costly than PEG+RBV as first line treatment.