OBJECTIVE: Imatinib is a novel targeted therapy that has shown high early efficacy in patients with unrespectable and/or metastatic malignant c-kit positive gastrointestinal stromal tumors (GIST). Allocation of health care resources to its use in this indication depends in part on its cost-effectiveness. We evaluated the cost-effectiveness of imatinib versus no active therapy for the treatment of patients with GIST. METHODS: Data on the use of imatinib in patients with GIST were drawn from an ongoing phase II study. Data for similar patients who received no active treatment were obtained from a separate retrospective review. A Markov modeling approach with monthly cycles for a period of ten years was used. Continuing treatment with imatinib depended on an absence of disease progression. Transition rates for death (both patient groups) and disease progression (imatinib group) were based on those observed for the two groups. Costs of treatment included drug therapy (imatinib group) and medical and hospice care (both groups) for surviving patients. Costs and benefits were discounted at 5% p.a. All costs were stated in AUS$ at 2003 prices. All analyses were conducted from the perspective of the Australian health care system. RESULTS: Reported median survival for untreated patients with advanced GIST is 18.9 months. After a median of 25 months of follow-up, 78% of patients treated with imatinib were still alive. It was estimated that treatment with imatinib offers, on average, an additional 3.0 years of survival (discounted), at an incremental lifetime cost of a$168,229 per patient. The cost per life year gained was estimated to be a$56,376 (discounted). CONCLUSION: The cost per life year gained of treatment with imatinib of patients with GIST is consistent with what has previously been accepted as cost-effective. Further analysis of imatinib’s cost-effectiveness is recommended as longer term survival data become available.