Objective: Hepatitis C is a disease affecting approximately 180 million people worldwide (WHO 2006) and is one of the main causes of chronic hepatic disease. HCV infection progresses to chronic form in 80% of infected individuals. Approximately 20% progress to cirrhosis over 20 years and, consequently, a high risk of developing hepatocellular carcinoma population. We assessed the incremental cost-effectiveness ratio (ICER) of peginterferon alfa-2a (40 KD) plus ribavirin (PEG+RBV) versus interferon alfa-2b plus ribavirin (IFN+RBV) in the treatment of patients with chronic hepatitis C under the Brazilian payer perspective. Methods: A Markov model was built to estimate the clinical and economic impact related to the incorporation of peginterferon-alfa-2a (40 KD). Clinical stages were based on liver histology, forms of cirrhotic decompensation, liver cancer and liver transplantation. A Delphi panel was performed for evaluating the direct medical resources related to each clinical stage in chronic hepatitis C, as well as costs from treatment with peginterferon-alfa-2a (40 KD), interferon alfa-2b and ribavirin. Effectiveness of treatment with peginterferon-alfa-2a (40 KD) was obtained from a multicenter, controlled, randomized trial involving 1121 naive patients with chronic hepatitis C (Fried et al, 2002). The model comprises a life-time horizon. We have assumed a discount rate of 3% for both costs and outcomes according to international recommendations (Gold et al, 1996). A sensitivity analysis was conducted using second-order Monte Carlo simulation. Tested parameters were costs per stage, treatment costs, discount rate, response rate to treatment, inflation rate and early patient distribution. Results: The ICER of PEG+RBV versus no treatment was approximately -R$62,521 per quality-adjusted life year(QALY) gained. The ICER of PEG+RBV versus IFN+RBV was approximately -R$20,087 per QALY. Conclusion: The study suggests peginterferon alfa-2a (40 KD) and ribavirin to be a dominant therapy for treating hepatitis C in the private health care system in Brazil.