OBJECTIVES: To perform a cost-effectiveness analysis of irbesartan for the management of nephropathy in patients with hypertension, type-2 diabetes and microalbuminuria in the Mexican scenario. METHODS: The treatment of patients was simulated with early irbesartan, 300 mg daily (initiating in the microalbuminuria stage) and late irbesartan (initiating in the stage of manifest nephropathy). These strategies were compared with a control, consisting of standard anti-hypertensive therapy. The progression of microalbuminuria to nephropathy, increase to the doubling of serum creatinine, end stage renal disease (ESRD) to death, was simulated over a temporary horizon of 20 years, using a Markov model previously published and adapted to the Mexican scenario. The transition probabilities were based in the study named Irbesartan in Reduction of Micro-albuminuria-2, and the study called Irbesartan in Diabetic Nephropathy Trial, and local sources. The costs and clinical outcomes were discounted to an annual rate of 3%, and the perspective of the public health care institutions in Mexico. RESULTS: With early irbesartan there was a gain of 539.1 years of life per 1000 treated patients, and with late irbesartan there was a gain of 131.1, both compared to control. After 20 years of treatment, early irbesartan prevented 87 cases of ESRD per 1000 patients treated, and late irbesartan prevented 54, both compared to control. The cost per life-year gained with early irbesartan was €22,998.93 and the cost per year free from ESRD with late irbesartan was €11,503.94. The sensitivity analysis showed that therapy with irbesartan is still cost-effective compared to conventional antihypertensive treatment after modifying various plausible assumptions. CONCLUSION: The addition of irbesartan to conventional antihypertensive therapy demonstrated an improvement in life expectancy and reduction in the years with ESRD. It represented a cost-effective option compared to control, which means greater efficiency in the treatment of hypertension patients with type-2 diabetes and microalbuminuria in Mexico.