BACKGROUND: Screening for hereditary hemochromatosis is traditionally done by using serum iron studies. However, mutation analysis of the hemochromatosis-associated HFE gene has recently become available. OBJECTIVE: To compare the cost-effectiveness of no screening with four screening strategies that incorporate HFE gene testing or serum iron studies. DESIGN: Cost-effectiveness analysis. DATA SOURCES: Published literature. TARGET POPULATION: Siblings and children of an affected proband. TIME HORIZON: Lifetime from 10 years of age (children) or 45 years of age (siblings). PERSPECTIVE: Societal. INTERVENTION: 1) Serum iron studies. 2) Gene testing of the proband. If the proband is homozygous (C82Y+/+), the spouse undergoes gene testing; if he or she is heterozygous (C82Y+/-), the children undergo gene testing. 3) Gene testing of the proband; if he or she is homozygous, relatives undergo gene testing. 4) Direct gene testing of relatives. OUTCOME MEASURES: Cost per life-year saved and incremental cost-effectiveness ratio. RESULTS OF BASE-CASE ANALYSIS: In children, HFE gene testing of the proband was the most cost-effective strategy for screening one child (incremental cost-effectiveness ratio, $508 per life-year saved). HFE gene testing of the proband followed by testing of the spouse was the most cost-effective strategy for screening two or more children (incremental cost-effectiveness ratio, $3665 per life-year saved). In siblings, all screening strategies were dominant compared with no screening. Strategies using HFE gene testing were less costly than serum iron studies. RESULTS OF SENSITIVITY ANALYSIS: Despite varying the prevalence of mutations and regardless of the cost of the genetic test in one- and two-way sensitivity analyses, HFE gene testing remained cost-effective. CONCLUSIONS: HFE gene testing for the C282Y mutation is a cost-effective method of screening relatives of patients with hereditary hemochromatosis.