OBJECTIVES: The efficiency of a radical prostatectomy (RP) and a permanent seed implantation (PSI) was compared as therapeutic alternatives in the treatment of stage T1-T2 prostate cancer in Germany. METHODS: The comparison between PSI and RP was made by a cost-effectiveness-analysis assisted by the software DATA Professional. Costs, efficacy and tolerability of both alternatives were the evaluation parameters. Data for probabilities of success and rates of adverse effects (AE) were taken from international studies. Success of therapy was defined as PSA (prostate-specific antigen)-progression free survival within 7 years. Therapy failure was defined as PSA levels > 0.2 ng/ml in two successive readings for RP cases and three consecutive rising PSA levels for PSI patients. Applying the perspective of the statutory health insurance (SHI) PSI is more cost-effective compared with RP. All direct (medical) costs of therapy of prostate cancer, of therapy failure and of treatment of AE, reimbursed by SHI in Germany, were considered. In accordance with the Hannover consensus guidelines, costs were discounted at 5% pa. RESULTS: Total costs amounted to 7691€ for a PSI and 8715€ for a RP. Effectiveness-adjusted costs at similar effectiveness rates (0.76 PSI, 0.76 RP) amounted to 10,120 € for PSI and 11,468 € for RP. PSI therefore dominates the RP alternative. Two sensitivity-analyses were conducted by varying probabilities of success for each alternative. PSI dominates RP as long as probability of success of PSI is not lower than 0.68 or for RP not higher than 0.85. CONCLUSIONS: Considering the perspective of SHI, the therapy of stage T1-T2 prostate cancer with permanent seed implantation is more cost-effective than radical prostatectomy.