Background:α-Interferon is widely accepted for treatment of adults with chronic hepatitis B, but its use remains limited in children, partly because of questions regarding its cost effectiveness. The aim of this study was to evaluate the cost effectiveness of α-interferon for children with chronic active hepatitis B.Methods:We estimated the cost per year of life saved by α-interferon therapy for three cohorts of patients with chronic active hepatitis B treated at 2, 12, or 25 years of age. We assumed that only patients with active viral replication would be treated and that α-interferon would prevent cirrhosis and hepatocellular carcinoma in a portion of the population treated. We calculated costs per year of life saved. Medical costs and years of life saved were discounted at 5% per year.Results:With a 30% response rate to α-interferon, there was a net savings in both money and lives in the children's group with a minimal cost per year of life saved for adolescents ($510) and adults ($934). Years of life saved per person were greater for children (1.0) than adults (0.5). With a 6% response rate, estimated costs per year of life saved for children ($5,700) were one-fourth of those of adults ($22,100).Conclusions:α-interferon therapy for patients with chronic active hepatitis B is cost effective. α-Interferon is more cost effective in toddlers than adults because of the smaller dose required and the greater increase in life expectancy of children.