OBJECTIVES:  The purpose of this study was to conduct a cost-utility analysis comparing sacral neuromodulation and augmentation cystoplasty for the management of refractory urge urinary incontinence in Mexico.  METHODS: Using a health care provider perspective, a state transition model was developed to compare costs (2011 Mexican pesos) and effectiveness (quality adjusted life-years, QALYs) of sacral nerve stimulation and augmentation cystoplasty. Evaluated in a Mexican hypothetical cohort, the primary outcome was the incremental cost-utility ratio (ICUR) which was defined as (sacral nerve stimulation cost – augmentation cystoplasty cost) / (sacral nerve stimulation QALYs – augmentation cystoplasty QALYs). The clinical data were obtained from major clinical trials. Costs were obtained from Diagnosis Related Groups database of the Mexican Social Security Institute. The sensitivity analysis was performed to assess the impact of varying efficacy, costs and adverse event rates over the range of reported values. RESULTS: In the base case scenario, sacral nerve stimulation was more effective (3.54 vs 1.64 QALYs) and more expensive ($191,825 vs. $107,912) than augmentation cystoplasty at 5-years. The incremental cost-utility ratio was $44,164 per additional QALY. Assuming a cost-effectiveness threshold of three times GDP per capita established by the World Health Organization, the sacral nerve stimulation is considered cost effective. In the sensitivity analyses, time horizon and cost of medical device were the most important determinants of variability in costs and clinical benefits. The ICUR remained cost-effective. Discount rate of 5% was applied. CONCLUSIONS: The use of sacral neuromodulation for refractory UUI treatment in Mexico will generate considerable quality of life improvements and it is economically cost-effective when compared with augmentation cystoplasty. Future cost-effectiveness studies should be made when botulinum toxin A injections become available in the country for the management of refractory UUI and when additional long-term efficacy and complications data become accessible.