OBJECTIVE To investigate the cost-effectiveness of palivizumab vs. no prophylaxis for respiratory syncytial virus (RSV) infection in preterm infants in Sweden. METHODS A probabilistic Markov model was populated using a nationwide register linkage and data from the literature. Cost-effectiveness was investigated from a societal perspective over a lifetime for infants born at <29 weeks of gestation. Palivizumab was modelled using assumptions for its direct effect on RSV hospitalization risk and an indirect effect (via decreased RSV hospitalization) on subsequent asthma and mortality during the epidemic. Costs and effects were discounted by 3%. RESULTS In the base case, prophylaxis resulted in an additional 0.102 quality-adjusted life-year (QALY) at a cost of 20,000 SEK relative to no prophylaxis (incremental cost-effectiveness ratio [ICER] 195,000 SEK/QALY). The probability of prophylaxis being cost-effective was 99% at a willingness-to-pay of 500,000 SEK/QALY. Assumptions about a causal association between RSV infection and subsequent asthma had a moderate impact, while exclusion of the indirect prophylaxis effect on mortality increased the ICER to 492,000 SEK/QALY. When excluding both of these, prophylaxis was not cost-effective. CONCLUSIONS Based on a willingness-to-pay of 500,000 SEK/QALY, palivizumab was found to be cost-effective compared with no prophylaxis for infants born at <29 weeks if severe RSV infection was assumed to increase subsequent asthma or mortality risk.