OBJECTIVES: Previous economic studies of Helicobacter pylori eradication in dyspepsia and peptic ulcer disease have not measured quality of life using utilities (preference probabilities), which are needed to compare the cost-effectiveness of such treatment to other health care interventions. The goals of this study were to measure quality of life in patients with dyspepsia or peptic ulcer and apply these measurements to published models of disease management to determine cost-effectiveness in dollars per quality-adjusted life year (QALY) gained. METHODS: Utilities for dyspepsia and peptic ulcer disease were measured in adult patients (n = 73) on chronic acid suppression for peptic ulcer or ulcer-like dyspepsia. Median utility values were applied to the results of published cost-effectiveness analyses and a previously validated dyspepsia model. Cost-utility ratios for early H. pylori eradication in uninvestigated dyspepsia and peptic ulcer disease were then computed. RESULTS: The total disutility, or lost quality of life, for an ulcer was 0.11 QALY, of which 0.09 QALY was attributed to dyspeptic symptoms. After these results were incorporated into published studies, cost-utility ratios for ulcer treatment varied from $3,100 to $12,500 per QALY gained, whereas estimates for uninvestigated dyspepsia management ranged from $26,800 to $59,400 per QALY. Sensitivity analyses indicated a range of $1,300 to $27,300 per QALY for management of duodenal ulcer and $15,000 to $129,700 per QALY for dyspepsia. CONCLUSIONS: Strategies that emphasize early H. pylori eradication were cost-effective for patients with peptic ulcer and possibly cost-effective for patients with uninvestigated dyspepsia, relative to other medical interventions. Dyspeptic symptoms cause significant disutility that should be incorporated in future cost-effectiveness analyses of treatment strategies.