OBJECTIVE: The Losartan Intervention For Endpoint Reduction in Hypertension study (LIFE) was a double-masked, randomized trial of losartan versus atenolol in 9193 patients with essential hypertension and left ventricular hypertrophy ascertained by electrocardiography. Losartan reduced the primary composite end point of cardiovascular death, myocardial infarction, or stroke by 13% (p = 0.021) and reduced the risk of stroke by 25% (p = 0.001), despite a comparable degree of blood pressure control. We aimed to evaluate the cost-effectiveness of losartan compared with atenolol in LIFE from a German health care system's perspective. METHODS: Discounted life expectancy with stroke, study medication use and quality of life by stroke status were estimated directly from the LIFE trial. The trial data were supplemented with data from Germany on discounted direct lifetime costs of stroke (€ 43,129) and discounted life expectancy in individuals without stroke. Quality-adjusted life years were estimated by weighting life years by health-related quality of life as measured by visual analogue scale data collected in the LIFE trial. RESULTS: The lower cumulative incidence of stroke for losartan at 5.5 years (4.9%) as compared with atenolol (6.5%) (p=0.003) was estimated to reduce stroke-related direct costs by € 691 per patient and thus to offset 52% of the incremental medication cost in patients receiving losartan. The cost per quality-adjusted life year gained was € 23,630 (95% CI: -1276 to 95,115) for losartan-based versus atenolol-based treatment. CONCLUSION: The clinical benefit of losartan in Germany is achieved at a cost well within accepted thresholds for cost-effectiveness. A substantial proportion of the incremental cost for losartan is offset due to strokes prevented.