OBJECTIVE To compare early use of transjugular intrahepatic portosystemic shunt (TIPS) with endoscopic treatment (ET) for the prophylaxis of recurrent variceal bleeding. METHODS In-patient data were collected from 190 patients between January 2007 and June 2010 who suffured from variceal bleeding. Patients who were older than 75 years; previously received surgical treatment or endoscopic therapy for variceal bleeding; and complicated with hepatic encephalopathy or hepatic cancer, were excluded from this research. Thirty-five cases lost to follow-up were also excluded. Retrospective analysis was done in 126 eligible cases. Among them, 64 patients received TIPS (TIPS group) while 62 patients received endoscopic therapy (ET group). The relevant data were collected by patient review or telephone calls. The occurrence of rebleeding, hepatic encephalopathy or other complications, survival rate and cost of treatment were compared between the two groups. RESULTS During the follow-up period (median, 20.7 and 18.7 mo in TIPS and ET groups, respectively), rebleeding from any source occurred in 11 patients in the TIPS group as compared with 31 patients in the ET group (Kaplan-Meier analysis and log-rank test, P = 0.000). Rebleeding rates at any time point (6 wk, 1 year and 2 year) in the TIPS group were lower than in the ET group (Bonferroni correction α' = α/3). Eight patients in the TIPS group and 16 in the ET group died with the cumulative survival rates of 80.6% and 64.9% (Kaplan-Meier analysis and log-rank test χ(2) = 4.864, P = 0.02), respectively. There was no significant difference between the two groups with respect to 6-wk survival rates (Bonferroni correction α' = α/3). However, significant differences were observed between the two groups in the 1-year survival rates (92% and 79%) and the 2-year survival rates (89% and 64.9%) (Bonferroni correction α' = α/3). No significant differences were observed between the two treatment groups in the occurrence of hepatic encephalopathy (12 patients in TIPS group and 5 in ET group, Kaplan-Meier analysis and log-rank test, χ(2) = 3.103, P = 0.08). The average total cost for the TIPS group was higher than for ET group (Wilcxon-Mann Whitney test, 52 678 RMB vs 38,844 RMB, P < 0.05), but hospitalization frequency and hospital stay during follow-up period were lower (Wilcxon-Mann Whitney test, 0.4 d vs 1.3 d, P = 0.01; 5 d vs 19 d, P < 0.05). CONCLUSIONS Early use of TIPS is more effective than endoscopic treatment in preventing variceal rebleeding and improving survival rate, and does not increase occurrence of hepatic encephalopathy.