Objective: To evaluate the cost-effectiveness of an elective cesarean delivery strategy in human immunodeficiency virus (HIV)-infected women receiving zidovudine therapy to prevent perinatal transmission. Methods: A decision-analysis model was constructed to compare two delivery strategies in HIV-infected women: usual care and recommendation for elective cesarean delivery. The model followed a hypothetical cohort of 7000 HIV-infected pregnant women in the United States who were receiving zidovudine therapy for 1 year. The third-party payer perspective was taken. Cost of delivery method with and without complications and lifetime medical care cost for pediatric HIV infection were considered. The main outcome measure was cases of perinatal HIV transmission prevented. Results: Compared with the usual care strategy, the elective cesarean delivery strategy resulted in an additional 3486 cesarean deliveries each year, prevented 142 cases (52.4%) of perinatal HIV transmission, and resulted in incremental overall cost savings to society of $5.3 million per year ($37,284 saved per case of perinatal transmission prevented). With other estimates held constant, the elective cesarean delivery strategy would not be cost saving when the baseline perinatal HIV transmission rates were all reduced by 43.3%. Conclusions: Elective cesarean delivery in HIV-infected women receiving zidovudine is one management strategy for prevention of perinatal HIV transmission and can be cost saving. However, if other strategies, such as use of combination antiretroviral therapy and/or measurement of viral load, result in at least 50% reduction of the baseline perinatal HIV transmission rates, elective cesarean delivery will not be cost saving.