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BACKGROUND: Although 5-alpha reductase inhibitors (5ARIs) have demonstrated that they reduce the risk of prostate cancer (PCa), they have not demonstrated cost effectiveness in the patient populations in which they have been examined. OBJECTIVE: A decision-analytic model was created to explore economic benefits from a third-party payer perspective of the use of 5ARIs in preventing PCa in men with different risk factors for developing the disease. METHODS: A Markov model was developed to simulate a cohort of men annually through health states (e.g. healthy male, benign prostatic hyperplasia [BPH], PCa, PCa recurrence) over a man's lifetime. Men with risk factors were treated with a 5ARI and compared with patients given no chemoprevention. Men from the general population were examined along with higher-risk men who had been referred to a PCa centre. Baseline risk was estimated via published risk data, risk factor analyses and risk equations. Clinical efficacy, morality, costs and utilities were obtained from published literature. Outcomes of the model included number of prostate cancers, incremental costs, incremental QALYs, incremental cost per QALY and number needed to treat. Along with sensitivity and scenario analyses, a validation of outcomes was performed. All costs were valued in $US, year 2009 values. Costs were discounted at 3% per annum. RESULTS: Men receiving 5ARIs benefited through a reduction in the number of PCas. Assuming a cost-effectiveness threshold of $US50 000 per QALY, chemoprevention with 5ARIs was cost effective ($US37 900 per QALY) in men from the general population who were aged 50 years with elevated prostate-specific antigen (PSA), and who were aged 50 years with PCa family history and elevated PSA ($US31 065 per QALY). Chemoprevention with 5ARIs was not cost effective in men aged 50 years with no additional risk factors, men aged 50 years with abnormal digital rectal examinations (DREs), and men aged 50 years with a family history ($US86 511, $US85 577 and $US84 950 per QALY, respectively). In higher-risk men, chemoprevention could be expected to be cost effective ($US18 490 to $US11 816 per QALY, depending on risk scenario). Results were sensitive to changes in utilities, assumed PCa risk reduction with 5ARIs, and patient age. CONCLUSION: When considering common risk factors associated with PCa, prevention with 5ARIs is expected to be cost effective in 50-year-old men with elevated PSA. As a man's risk increases, the cost effectiveness of 5ARI chemoprevention improves