OBJECTIVES: To analyse the cost-effectiveness of adding adjuvant postoperative radiotherapy (RT) to medical therapy after breast conservation surgery in Stages I-II breast cancer in Sweden. METHODS: A stochastic decision analytic model follow patients from primary breast conservation therapy during adjuvant therapy and include five possible events of local or regional events, metastases and death. Clinical data were taken from a randomised clinical trial (SweBCG 91-RT) including 1,187 women aged 75 or younger who had received breast conservation surgery and axillary dissection in Sweden between 1991 and 1997 and with a median follow-up of five years. Data on health care costs were taken from a breast cancer register, a health care database including all hospital and primary care contacts in the West Healthcare Region. Costs for pharmaceuticals, hospice, homecare and values of utilities were taken from the literature. RESULTS: Model results show a ten years risk of local and regional event of 24.1 and 8.4 percent for the no RT and RT groups, respectively. There was a significant increase in average Quality Adjusted Life Years (QALYs) of 0.13 (from 7.60 to 7.73) but no significant difference in average life expectancy. Treatment costs increased from SEK97,467 (€10,800) to SEK101,453 (€11,300) per patient. RT shows an incremental cost per QALY of SEK 32,000 (€3,600). Model applications for 15 and 20 years results in cost savings due to a larger amount of prevented relapses. Considering RT as an add-on to novel adjuvant medical treatments regimens will however, reduce the incremental benefit of radiotherapy and the subsequent cost offsets. CONCLUSIONS: Postoperative RT is cost-effective for pre- and postmenopausal breast cancer women with Stage I-II undergoing breast conservation therapy in Sweden only as an adjunction to no medical adjuvant treatment. As an adjunct to novel adjuvant medical therapies, RT is cost-effective in high-risk groups.