OBJECTIVES: The purpose of this study was to examine cost-effectiveness of varenicline, a pharmacotherapy developed to support smoking cessation, versus currently available alternatives. METHODS: Two analytic decision tree models were used to simulate effectiveness of varenicline versus bupropion and varenicline versus nicotine replacement therapy (NRT). A 30-year Markov model with health states “Smoker”, “Quitter” and “Dead” was used for a hypothetical cohort of Korean smokers who are over 30 years old and willing to quit smoking. The population entered in the model received three months of therapy. Utility values of smokers and quitters incorporated in the model were collected from local data. Transition probabilities were from clinical trials and local statistic data, and cost data were obtained from Korean health insurance reimbursement price list and local market price for non-reimbursement products. The model used a 5% discount rate for costs and effectiveness. Sensitivity analyses were conducted on various parameters such as the time to reach mortality rate of ex-smokers compared to that of non-smokers, time horizon and discount rate. RESULTS: The effectiveness of varenicline compared with bupropion and NRT was greater while it was more costly than both. The incremental effectiveness of varenicline versus bupropion and NRT was similar at 77,965 QALYs. The incremental cost of varenicline versus bupropion was 826 billion KRW and 1,428 billion KRW with NRT. The ICER of varenicline comparing to bupropion and NRT were estimated at 10.6 million KRW per QALY and 19 million KRW per QALY, respectively. Sensitivity analyses were quite robust for all parameters but it was most sensitive to time horizon. CONCLUSIONS: Varenicline treatment for smoking cessation can be considered as cost-effective compared with existing therapies in Korea. The ICER becomes lower when morbidity rates of smoking related diseases are reflected.