Prevention of variceal rebleeding is mandatory in cirrhotic patients. We compared the efficacy, safety, and cost of transjugular intrahepatic portosystemic shunt (TIPS) versus pharmacologic therapy in preventing variceal rebleeding in patients with advanced cirrhosis. A total of 91 Child-Pugh class B/C cirrhotic patients surviving their first episode of variceal bleeding were randomized to receive TIPS (n = 47) or drug therapy (propranolol + isosorbide-5-mononitrate) (n = 44) to prevent variceal rebleeding. Mean follow-up was 15 months. Rebleeding occurred in 6 (13%) TIPS-treated patients versus 17 (39%) drug-treated patients (P = .007). The 2-year rebleeding probability was 13% versus 49% (P = .01). A similar number of reinterventions were required in the 2 groups; these were mainly angioplasty ± restenting in the TIPS group (90 of 98) and endoscopic therapy for rebleeding in the medical group (45 of 62) (not significant). Encephalopathy was more frequent in TIPS than in drug-treated patients (38% vs. 14%, P = .007). Child-Pugh class improved more frequently in drug-treated than in TIPS-treated patients (72% vs. 45%; P = .04). The 2-year survival probability was identical (72%). The identified cost of therapy was double for TIPS-treated patients. In summary, medical therapy was less effective than TIPS in preventing rebleeding. However, it caused less encephalopathy, identical survival, and more frequent improvement in Child-Pugh class with lower costs than TIPS in high-risk cirrhotic patients. This suggests that TIPS should not be used as a first-line treatment, but as a rescue for failures of medical/endoscopic treatments (first-option therapies).