OBJECTIVES: It is estimated that up to 1.4 million prison inmates are infected with hepatitis C each year. The study objective is to assess the cost-effectiveness of screening in the incarcerated population of Maryland's correctional facilities, from a societal perspective. METHODS: We used a Markov model with a 1-year cycle length, to simulate hepatitis C disease progression in a hypothetical cohort of prisoners, mean age 30 years old, and largely (90%) males, whose estimated incarceration time is at least 15 months. The screening strategy included a preliminary test by ELISA followed by confirmatory qualitative PCR. The treatment consisted of combination therapy (pegylated interferon and ribavirin) for 48 and 24 weeks in patients with genotype 1 and genotype 2 or 3 respectively. Costs (2004, US dollars) and effectiveness measures (Quality Adjusted Life Years- QALYs) were discounted at 3%. Costs, specificity, and sensitivity of tests were obtained from published studies. Age and gender specific mortality rates were obtained from U.S. life tables. Estimates of disease progression rates were obtained from previously published cost-effectiveness studies of combination treatment. Treatment efficacy rates were obtained from pooled studies of randomized controlled clinical trials. Detailed resources utilization costs in each of the clinical states (hospitalizations, medications, interventions, and outpatient visits) were obtained from a previously published study. QALYs for each clinical state were obtained from a previously published estmiations using a panel of hepatologists. Univariate sensitivity analyses were performed to control for uncertainty. RESULTS: The incremental cost effectiveness of screening relative to no screening was $952 per QALY gained. The model was robust to the changes in the plausible values of the parameters. CONCLUSIONS: Our model indicates that it is cost-effective to screen prison populations.