Hepatitis B immunoglobulin with lamivudine prophylaxis (LAM/HBIG) is effective in preventing Hepatitis B (HBV) recurrence posttransplant but is expensive and inconvenient. Lamivudine-resistant HBV, which has limited the usefulness of lamivudine monoprophylaxis in transplant, can now be effectively controlled with adefovir dipivoxil. We performed a cost-effectiveness analysis on the strategies of lamivudine prophylaxis with adefovir rescue(LAM/ADV) compared to combination LAM/intravenous fixed high-dose HBIG prophylaxis(LAM/ivHBIG) or LAM/intramuscular HBIG prophylaxis(LAM/imHBIG). Markov modeling was performed with analysis from societal perspective. Probability rates were derived from systematic review of the literature and cost taken from MEDICARE database. Outcome measures were incremental cost-effectiveness ratio(ICER) and cost to prevent each HBV recurrence and death. Analysis was performed at 5 years posttransplant as well as at end of life expectancy (15 years). Combination LAM/ivHBIG cost an additional USD562,000 at 15 years, while LAM/imHBIG cost an additional USD139,000 per patient compared to LAM/ADV. Although there is an estimated increase in recurrence of 53% with LAM/ADV and 7.6% increased mortality at the end of life expectancy (15 years), the ICER of LAM/ivHBIG over LAM/ADV treatment is USD760,000 per quality-adjusted life-years and for LAM/imHBIG, USD188,000. Cost-effectiveness is most sensitive to cost of HBIG. Lamivudine prophylaxis with adefovir dipivoxil salvage offers the more cost-effective option for HBV patients undergoing liver transplant but with higher recurrence and death rate using a model that favors LAM/HBIG. Lowering the cost of HBIG maintenance will improve cost-effectiveness of LAM/HBIG strategy. In conclusion, a tailored approach based on individual risks will optimize the cost-benefit of HBV transplant prophylaxis. Liver Transpl 12:736–746, 2006. © 2006 AASLD.