OBJECTIVE: To determine lifetime costs and outcomes in term of quality-adjusted life-years (QALYs) for patients with end stage renal diseases who received renal replacement therapy either hemodialysis (HD) or continuous ambulatory peritoneal dialysis (CAPD). METHODS: Cost utility analysis of HD and CAPD used Markov model with one-year cycle. Data on direct medical costs and utilities were derived from results of the studies conducted in Thailand, and effectiveness was abstracted from the 2002 annual data reported by U.S. Renal Data System (USRDS). Both costs and outcomes occurring in the future were discounted at 3% per year. RESULTS: For HD and CAPD, lifetime costs per patient were Baht 4.54 million (US$106,619) and Baht 5.36 million (US$125,892); life expectancy was 3.16 and 3.59 years; and QALYs were 1.28 and 1.42 years, respectively. An incremental cost-effectiveness ratio (ICER) of CAPD as compared with HD was Baht 1.90 million (US$44,677) per life year saved and Baht 6.15 million (US$144,666) per QALY. By adding direct non-medical costs and indirect costs, ICER of CAPD decreased to Baht 1.00 million (US$23,553) per QALY. Adding costs associated with treatments due to complications, ICER increased Baht 1.31 million (US$30,780) per QALY for every Baht 10,000 (US$235) of the higher cost of CAPD. When the utility of HD was greater than CAPD by 0.10, CAPD became economically dominated by HD. CONCLUSION: CAPD was slightly more effective than HD in term of QALY, ICER of CAPD as compared with HD were beyond US$100,000 per QALY, which was considered not very cost-effective technology.