BACKGROUND: The Multicenter Automatic Defibrillator Implantation Trial (MADIT)-II demonstrated that implantable cardioverter defibrillators (ICDs) save lives when used in patients with a history of myocardial infarction (MI) and an ejection fraction of 0.3 or less. OBJECTIVE: To investigate the cost-effectiveness of implanting ICDs in patients who met MADIT-II eligibility criteria and were enrolled in the Duke Cardiovascular Database between 1 January 1986 and 31 December 2001. DESIGN: Cost-effectiveness analysis. DATA SOURCES: Published literature, databases owned by Duke University Medical Center, and Medicare data. TARGET POPULATION: Adults with a history of MI and an ejection fraction of 0.3 or less. TIME HORIZON: Lifetime. PERSPECTIVE: Societal. INTERVENTIONS: ICD therapy versus conventional medical therapy. OUTCOMES MEASURES: Cost per life-year gained and incremental cost-effectiveness. RESULTS: Compared with conventional medical therapy, ICDs are projected to result in an increase of 1.80 discounted years in life expectancy and an incremental cost-effectiveness ratio of 50,500 dollars per life-year gained. Cost-effectiveness varied dramatically with changes in time horizon: The cost-effectiveness ratio increased to 67,800 dollars per life-year gained, 79,900 dollars per life-year gained, 100,000 dollars per life-year gained, 167,900 dollars per life-year gained, and 367,200 dollars per life-year gained for 15-year, 12-year, 9-year, 6-year, and 3-year time horizons, respectively. Changing the frequency of follow-up visits, complication rates, and battery replacements had less of an effect on the cost-effectiveness ratios than reducing the cost of ICD placement and leads. LIMITATIONS: The study was limited by the completeness of the data, referral bias, difference in medical therapy between the Duke cohort and the MADIT-II cohort, and not addressing potential upgrades to biventricular devices. CONCLUSIONS: The economic expense of defibrillator implantation in all patients who meet MADIT-II eligibility criteria is substantial. However, in the range of survival benefit observed in MADIT-II, ICD therapy for these patients is economically attractive by conventional standards.