In the National Surgical Adjuvant Breast and Bowel Project P-1 Breast Cancer Prevention Trial (BCPT), women considered to be at high risk for developing breast cancer who received tamoxifen experienced 49% and 50% reductions in the risk of developing invasive and noninvasive breast cancer, respectively, compared with women receiving placebo. Although the BCPT addressed the clinical benefits of tamoxifen, this study sought to assess its cost effectiveness in the prevention of breast cancer in women at increased risk for developing the disease. Women were considered to be at an increased risk if they were: 1) 60 years of age or older, 2) age 35 to 59 years with a history of lobular carcinoma in situ, or 3) age 35 to 59 years with additional risk factors that made their 5-year predicted breast cancer risk at least as great as that of women 60 years of age. A decision-analysis model was used to estimate the incremental cost effectiveness of using tamoxifen compared with no intervention as preventive therapy in age-group defined cohorts of women who were at high risk for developing breast cancer. The analysis used data on the benefits and risks of tamoxifen as observed in the BCPT. In a subgroup analysis, tamoxifen's cost effectiveness was also evaluated in women who had had a hysterectomy, because of evidence that suggested an increased risk of endometrial cancer in women receiving tamoxifen. Under conservative assumptions from a base-case analysis, the incremental cost effectiveness of tamoxifen is $41,372 per life-year gained for women age 35 to 49 years, whereas for women age 50 to 59 years and 60 to 69 years, these values are $68,349 and $74,981, respectively. For women with a previous hysterectomy, tamoxifen's cost effectiveness is $46,060 per life-year gained. A strategy of using tamoxifen in high-risk women to prevent breast cancer in high-risk women may be cost effective, particularly in the 35-to-49 year-old age group and in those of any age who have had a hysterectomy.