OBJETIVE: The hepatitis C treatment with conventional interferon monotherapy has been under discussion because of its low response rate (10-20%). However, combination therapies involving ribavirin and the new two pegylated interferons have raised the response rates beyond 50%. This study analyses the cost-effectiveness ratios for two different peginterferons (peginterferon alfa-2a and peginterferon alfa-2b) plus ribavirin compared with interferon-alfa 2b plus ribavirin METHOD: A Markov model was developed to represent the natural history of hepatitis C and to estimate the incremental cost-effectiveness ratios for the two different peginterferons plus ribavirin compared with interferon-alfa 2b plus ribavirin. The results of two indipendent clinical trials comparing these treatment alternatives in naive patients with HCV infection and no co-morbidity have been obtained from several publications. The model was applied separately to both trials. To evaluate the natural history of decompensated cirrhosis, 200 patients with decompensated liver disease from hepatitis C etiology were studied depending on the first decompensation event in two different hospitals in Spain. RESULTS: The results indicate costs of €20,751/ life-year gained using efficacy data from the peginterferon alfa-2b trial and €10,350/ life-year gained employing the peginterferon alfa-2a trial data. When a test is used at 12 weeks to facilitate an early detection of non-responders, the figures lower to €14,037 and €6,605/life-year gained, respectively. CONCLUSION: The main conclusion is that the combined treatment of peginterferon plus ribavirin is cost-effective showing peginterferon alfa-2a a better cost-effectiveness ratio than peginterferon alfa-2b. Efficiency decreases with advancing age and can be increased when strategies of early selection are employed to identify those patients who, without sustained viral response, would not benefit from the treatment.