Objective. To determine the cost-utility of low-dose misoprostol prophylaxis in rheumatoid arthritis (RA) patients treated with nonsteroidal antiinflammatory drugs (NSAIDs). Methods. Prospectively collected, population-based data on 57 RA patients' preferences (obtained using the category scaling and time trade-off techniques), charge data from a consecutive, population-based cohort of 36 RA patients with NSAID-related gastric ulcer, and literature-derived probability estimates were incorporated into a decision analysis model. Results. Probabilistic sensitivity analysis using 10,000 Monte Carlo simulations demonstrated that, on average, prophylaxis resulted in modest additional costs and no additional quality-of-life benefits. At best, the incremental cost per quality-adjusted life year gained was $9,333. At worst, prophylaxis reduced quality of life. Prophylaxis was cost-saving if the ulcer complication rate was >1.5%, or if the 3-month price of misoprostol was less than or equal to$95.