OBJECTIVES: UK guidelines for managing acute mania call for initiation of treatment with mood stabilizer or antipsychotic monotherapy. Although atypical antipsychotics are better tolerated and may provide more rapid symptom resolution than conventional antipsychotics, conventional antipsychotics are widely used in practice due to lower acquisition costs. The objective of this study was to assess the cost-effectiveness of atypical antipsychotics in acute mania. METHODS: We developed a state-transition Markov model to estimate the cost-effectiveness of antipsychotic monotherapy in patients hospitalized for a new episode of acute mania. A hypothetical cohort of 1000 patients was assumed to receive initial therapy with: haloperidol 15 mg/day, olanzapine 15 mg/day, or risperidone 4 mg/day. Over subsequent 3-week cycles, patients may remain manic, become depressed, die from suicide or other causes, or stabilize. The model tracks patients’ state transitions over 24 weeks and tabulates cumulative lifetime costs. Transition probabilities and cost estimates were derived from published literature. The NHS perspective was applied; therefore only direct medical costs (for drugs, hospitalization, etc.) were considered. Expected costs, expected number of treatment responders, and incremental cost per responder were estimated; response was defined as stabilization within the first 3-week treatment cycle. The model’s robustness to base-case assumptions was assessed using multivariate sensitivity analysis. RESULTS: Risperidone monotherapy was the least costly (£17,260,500) and olanzapine monotherapy the most costly (£17,555,300) treatment strategy. Consistent with drug efficacies reported in the clinical trials, risperidone monotherapy provided the most responders per 1000 patients (537) and haloperidol monotherapy the fewest (460). In base-case analyses, risperidone dominated both haloperidol and olanzapine by being both less costly and more effective; however, this outcome was sensitive to assumptions regarding drug efficacy. CONCLUSIONS: Based on current evidence, risperidone monotherapy dominates both olanzapine and haloperidol monotherapy by being both less costly and more effective in the treatment of acute mania.