OBJECTIVES: To compare the cost effectiveness of intravaginal prostaglandin E2 gel and intravaginal misoprostol tablets for preinduction cervical ripening. METHODS: This study was a modeled cost-effectiveness analysis from the hospital perspective. A decision analysis was used to estimated costs and percentage of women achieving vaginal delivery with either intravaginal prostaglandin E2 or intravaginal misoprostol. Costs were assessed in 1999 dollars and obtained from Brigham and Women's Hospital in Boston, Massachusetts. Probabilities and percentage of patients achieving vaginal delivery within 24 hours were obtained by meta-analysis of published trails. Health resoursed used for the rate of delivery after each dose of the study agents were obtained through an expert physician pane. RESULTS: The primary outcome measures were direct medical costs, in 1999 dollars, and effect was measured as percentage of patients achieving successful cervical ripening, leading to labor induction and vaginal delivery before use of an alternative method. The meta-analysis included a total of 9 trials incorporating 1,056 patients. Direct medical costs for prostaglandin E2 was $1,852.14 and $1,941.51 for misoprostol. Eighty-five percent of patients receiving misoprostol and 71% of patients receiving prostaglandin E2 achieved vaginal delivery before the use of an alternative method. CONCLUSION: Though misoprostol is less expensive per dose compared to prostaglandin E2, the overall treatment costs are higher when encompassing costs associated with adverse effects. Therefore, an incremental cost analysis demonstrates that if the hospital is willing to pay $638 more per patient, there will be a 1% greater chance of achieving vaginal delivery.