OBJECTIVE: To evaluate the cost-effectiveness of tamsulosin, doxazosin or terazosin as initial treatments for moderate benign prostatic hyperplasia (BPH). METHODS: A decision analytic model is used to project the costs and effectiveness of treatment at 6-month intervals over three years following initiation of therapy with tamsulosin, doxazosin or terazosin. Patients initially treated with doxazosin or terazosin who discontinue due to hypotensive events are switched to tamsulosin. Finasteride is added in the event of treatment failure not related to adverse events. Medical treatment failures transition to transurethral resection of the prostate (TURP) and, if needed, a second TURP. Values for treatment failure rates and clinical event cost parameters are derived from the literature. Only direct medical costs are included and are discounted by 3% per year. Effectiveness is measured as successful medical treatment (without TURP) over three years. RESULTS: In the reference case, discounted BPH-related total direct medical costs over 3 years are $3715, $3756, and $3992 for generic terazosin, generic doxazosin, and tamsulosin, respectively. Estimated medical treatment success rates at 3 years are 72.41% for tamsulosin, 69.62% for terazosin and 69.28% for doxazosin. The incremental cost for tamsulosin vs. terazosin is $278, which yields an incremental cost-effectiveness ratio of $9964 per success. Decision model results are sensitive to parameter values for treatment efficacy, drug costs, discontinuation rates, and dosing frequency. CONCLUSION: As an initial medical therapy for moderate BPH, tamsulosin is more effective than generic terazosin or doxazosin, with an incremental cost of about $93 per year or about $7.75 per month. From a payer's perspective, with differential generic/brand patient co-pays of $8/month or more, tamsulosin is cost saving.