OBJECTIVES: To evaluate the effects of smoking cessation treatment with varenicline in Germany. METHODS: The health-economic model follows a hypothetical cohort of smokers in Germany who make a single attempt to quit smoking. The Markov model considers the possibility of the following smoking-related diseases: chronic obstructive pulmonary disease (COPD), coronary heart disease (CHD), stroke and lung cancer. The time horizon of the model covers the whole lifespan of the initial cohort with a discount rate of 5% for costs and health effects. Smoking cessation with varenicline will be compared with bupropion, nicotine replacement therapy (NRT) and unaided cessation (status quo) from the health care system perspective. RESULTS: Based on the demographic data used, the model baseline cohort consists of 5.18 million smokers. On the basis of the results of this study, smoking cessation with varenicline proved cost-saving or cost effective in relation to the alternatives studied. Overall, a gain of about 78 – 200 thousand life years (LYG) or 88 – 226 thousand quality-adjusted life years (QALYs) can be obtained in a long-term. The incremental cost-effectiveness ratio (ICER) is 2.330 EUR per LYG (2.073 per QALY) and 1.781 EUR per LYG (1.584 per QALY) compared to unaided cessation or bupropion, respectively. Varenicline is a dominant strategy compared to NRT. Even if the savings from avoided smoking-related diseases are ignored and the time horizon will be reduced to 20 years, varenicline remains cost-effective with ICER under 18.000 EUR per LYG and QALY compared to all other alternatives. CONCLUSION: The results corroborate the findings of health benefits and favourable cost-effectiveness of smoking cessation pharmacotherapy from former studies.