OBJECTIVES: Although the prevalence of hepatitis C virus (HCV) infections is higher among the United States veterans than in the general population, a paucity of pharmacoeconomic research has been conducted from its perspective. This study compared the cost-utility of the current peginterferon regimens from the perspective of the Veterans Affairs (VA) health care system. METHODS: A Markov model for treatment-naïve chronic hepatitis C patients was developed to evaluate 1) peginterferon alfa-2a plus ribavirin (PEG 2a+R); 2) peginterferon alfa-2b plus ribavirin (PEG 2b+R); and 3) no therapy. Patient cohorts were 45 or 55 year-old males with liver fibrosis and without cirrhosis. Data for the model were obtained from clinical trials and published literature. All costs were based on VA costs and reflect 2005 U.S. dollars. The lifetime expected costs, quality-adjusted life years (QALYs) gained, and incremental net monetary benefit (INMB) with HCV treatments were determined. Ninety-five percent confidence intervals (CI) were generated from the Monte Carlo simulations. RESULTS: Both peginterferon regimens were significantly more cost-effective than no treatment, though no differences in costs or QALYs were noted between the two peginterferon regimens. For 45 year-old cohort with a genotype 1 infection, the INMB was $128,583 (95% CI $79,279 to $177,308) and $128,025 (95% CI $80,425 to $173,448) versus no treatment for PEG 2a+R and PEG 2b+R, respectively. Treatment with either peginterferon regimen produced significantly lower lifetime HCV-related medical costs for genotype 2 or 3 infections, but not genotype 1. CONCLUSIONS: PEG 2a+R and PEG 2b+R were found to be similar cost-effective treatments for patients with HCV infections, particularly with genotypes 2 and 3. However, no significant differences in costs or efficacy were observed between these treatment regimens.