OBJECTIVE To assess the cost effectiveness of adding universal hepatitis B vaccination in infancy or pre-adolescence to a policy of selective vaccination of at risk groups. METHODS Costs of a selective policy and additional costs of universal vaccination policies were estimated from costs of vaccine delivery and published data on target populations. Additional years of life gained were calculated for each policy by applying life tables to estimates of mortality attributable to hepatitis B. METHODS England and Wales. RESULTS Compared with no vaccination, vaccination in infancy was the most cost effective followed by vaccination in preadolescence. Selective vaccination was the least effective (cost per year of life gained 2568 pounds, 2824 pounds, and 8564 pounds respectively). Adding vaccination in infancy or at pre-adolescence to a selective policy cost 1537 pounds or 1658 pounds per year of life gained. Discounting years gained in the future at 6% per annum, however, made pre-adolescent vaccination more cost effective than infant or selective vaccination (51,817 pounds, 94,821 pounds, and 124,779 pounds per discounted year of life gained). Adding pre-adolescent vaccination to a selective policy cost 32,125 pounds per discounted year of life gained and infant vaccination, 77,085 pounds. CONCLUSIONS Universal vaccination against hepatitis B was more cost effective than selective vaccination in a low prevalence country. Discounting future health gain, however, made universal infant vaccination lest cost effective than universal pre-adolescent vaccination. If future health gained is as important as present gain the addition of universal vaccination to a selective policy is equivalent to the cost per quality adjusted year of life from renal transplantation or breast cancer screening.