OBJECTIVES: Linezolid has demonstrated improved survival and clinical cure rates in hospitalised patients with nosocomial pneumonia (NP) caused by known or suspected methicillin-resistant Staphylococcus aureus (MRSA). This study assessed the cost-effectiveness of linezolid vs. vancomycin from the perspective of the French health system. METHODS: A decision-analytic model followed an average patient from initiation of empiric treatment until successful 1st-line treatment, death, or 2nd-line treatment failure. Efficacy data were derived from published clinical trials. Five French physicians experienced in treating NP provided resource utilization data through structured interviews. Costs from official price and tariff lists were applied to antibiotic therapy, hospitalisation (by ward type), isolation, tests, and adverse events. The model applied similar length of successful 1st-line treatment for linezolid and vancomycin. The model base case conservatively assumed that length of stay was equal to therapy duration. Outcomes included total cost per patient, cost per cure, cost per death avoided, and cost per life year gained. RESULTS: An additional 7.6% of patients treated with linezolid (70.9%) vs. vancomycin (63.2%) were cured. Average total cost per episode was €16,732 for linezolid vs. €15,375 for vancomycin, Modelled survival was 80.4% (linezolid) vs. 69.7% (vancomycin), resulting in an average 2.0 life-years gained per linezolid patient in a 65-year-old cohort (14.9 vs. 13.0 years). Costs per life-year gained (excluding future costs) and death avoided were €685 and €12,727, respectively. One-way sensitivity analysis on selected parameters (50% variation above or below baseline) did not change the overall conclusions. CONCLUSION: Improved clinical outcomes, but increased cost per episode were calculated for linezolid-treated patients. The results suggest that linezolid can be considered a cost-effective alternative for treating patients with NP due to suspected MRSA in France.