The cost-effectiveness of combination therapy with an α1 blocker and dutasteride in benign prostatic hyperplasia (BPH) was analyzed in comparison with α1 blocker monotherapy. A Markov model with seven health states related to BPH was constructed with 4-year and 10-year time horizons and from the entire payers perspective. The transition probabilities among different health states input into the model were mainly derived from CombAT Study data, while cost parameters were estimated from a clinical database including DPC claims. Effectiveness was defined as quality adjusted life year (QALY). The cost-effectiveness of combination therapy was assessed by the incremental cost-effectiveness ratio (ICER) threshold (6 to 7 million Japanese yen (JPY)/QALY gained). For a base-case analysis, combination therapy produced an incremental effectiveness versus monotherapy of 0.050 and 0.097 QALYs at 4 years and 10 years, respectively, while the concomitant incremental costs were estimated to be 257,172 and 579,908 JPY, respectively. The ICERs for combination therapy versus monotherapy calculated at 4 years and 10 years were 5,119,007 and 5,974,495 JPY/QALY gained, respectively, both below the acceptable ICER threshold. Sensitivity analyses revealed that the ICER tended to decrease with greater BPH severity. These findings suggest that combination therapy with an α1 blocker and dutasteride would be more cost-effective in BPH than α1 blocker monotherapy and more efficient in moderate-to-severe BPH.