BACKGROUND The objective of this work was to determine the cost-effectiveness of temozolomide compared with that of radiotherapy alone in the adjuvant treatment of newly diagnosed glioblastoma. Temozolomide is the only chemotherapeutic agent to have demonstrated a significant survival benefit in a randomized clinical trial. Our analysis builds on earlier work by incorporating caregiver time costs and generic temozolomide availability. It is also the first analysis applicable to the US context. METHODS A systematic literature review was conducted to collect relevant data. Transition probabilities were calculated from randomized controlled trial data comparing temozolomide plus radiotherapy with radiotherapy alone. Direct costs were calculated from charges reported by the Mayo Clinic. Utilities were obtained from a previous cost-utility analysis. Using these data, a Markov model with a 1-month cycle length and 5-year time horizon was constructed. RESULTS The addition of brand Temodar and generic temozolomide to the standard radiotherapy regimen was associated with base-case incremental cost-effectiveness ratios of $102 364 and $8875, respectively, per quality-adjusted life-year. The model was most sensitive to the progression-free survival associated with the use of only radiotherapy. CONCLUSIONS Both the brand and generic base-case estimates are cost-effective under a willingness-to-pay threshold of $150 000 per quality-adjusted life-year. All 1-way sensitivity analyses produced incremental cost-effectiveness ratios below this threshold. We conclude that both the brand Temodar and generic temozolomide are cost-effective treatments for newly diagnosed glioblastoma within the US context. However, assuming that the generic product produces equivalent quality of life and survival benefits, it would be significantly more cost-effective than the brand option.