Using outcomes data from the Adult-to-Adult Living Donor Liver Transplantation Cohort Study, we performed a cost-effectiveness analysis exploring the costs and benefits of living donor liver transplantation (LDLT). A multistage Markov decision analysis model was developed with treatment, including medical management only (strategy 1), waiting list with possible deceased donor liver transplantation (DDLT; strategy 2), and waiting list with possible LDLT or DDLT (strategy 3) over 10 years. Decompensated cirrhosis with medical management offered survival of 2.0 quality-adjusted life years (QALYs) while costing an average of $65,068, waiting list with possible DDLT offered 4.4-QALY survival and a mean cost of $151,613, and waiting list with possible DDLT or LDLT offered 4.9-QALY survival and a mean cost of $208,149. Strategy 2 had an incremental cost-effectiveness ratio (ICER) of $35,976 over strategy 1, whereas strategy 3 produced an ICER of $106,788 over strategy 2. On average, strategy 3 cost $47,693 more per QALY than strategy 1. Both DDLT and LDLT were cost-effective compared to medical management of cirrhosis over our 10-year study period. The addition of LDLT to a standard waiting list DDLT program is effective at improving recipient survival and preventing waiting list deaths but at a greater cost.