The risk of a major complication from “blind” percutaneous liver biopsy is reported to be in the range of 0.24% to 3.8%. In a recent randomized trial, patients whose liver biopsies were performed with ultrasonography had a significant reduction in complications requiring hospitalization compared with patients without ultrasound-guided biopsies (0.5% vs. 2.2%, P < .05). Despite this, routine use of ultrasonography for liver biopsies has not been implemented because of controversies with respect to cost-effectiveness. The aim of our study was to analyze the relative cost-effectiveness of performing ultrasound-guided liver biopsies using decision analysis. A decision tree was constructed to compare a strategy of liver biopsy using ultrasonography with a strategy without ultrasonography. The major outcomes included were minor complications such as pain requiring analgesics and major complications, which require hospitalization. Costs included were direct medical costs from the payer's perspective. In our baseline model, the cost from complications per patient with and without ultrasonography was $62 and $129, respectively. The marginal effectiveness expressed as the number of major complications avoided was 1.2/100 liver biopsies. The incremental cost to avoid one major complication was $2,731. The model was most sensitive to the frequency of major complications and the additional cost of ultrasonography. Our decision analysis model suggests that ultrasound-guided liver biopsy is cost-effective. Future studies assessing the efficacy of image-guided liver biopsies should be conducted.