OBJECTIVE: To estimate the costs and effects of long-acting risperidone (the first long-acting injectable atypical) as first-line treatment for non-compliant schizophrenic patients, versus a conventional depot and continuing short-acting oral atypical formulations over a five year period in the Netherlands. METHODS: A discrete event model was developed comparing three scenarios. In scenario 1, patients start with haloperidol depot, after which they may be treated with olanzapine and clozapine. Scenario 2 is similar to 1 except that patients start with long-acting risperidone. In scenario 3, patients start (or continue) with olanzapine, after which they may subsequently be treated with risperidone (oral) and clozapine. The model takes account of patient characteristics and time dependent variables. Patient characteristics are age, gender, severity, being prone to side effects and the potential to be dangerous. Variables changing in time are outpatient visits, being in a psychotic episode, symptom score, treatment, compliance, having side effects and treatment location. Dependencies are taken into account. Costs are calculated guided by visits, medication and location. Outcomes are expressed in terms of the number and duration of psychotic episodes and the cumulative PANSS-score. Information on treatment alternatives, transition probabilities, model structure and health care utilisation was derived from literature and an expert panel. RESULTS: It is estimated that first-line treatment with long-acting risperidone is economically dominant over the alternatives. Per 1000 patients, it is estimated to prevent approximately 200 and 410 relapses in five years compared to scenario 1 and 3. Correspondingly, it is estimated to save €15,115 and €6,972 per patient. Sensitivity analyses show that the conclusion of economic dominance is very robust. CONCLUSION: Long-acting risperidone combines additional effectiveness with cost savings in patients with a high probability of being non-compliant, and should be preferred first-line treatment over oral atypicals and conventional depots.