Background/Aims: Although dysphagia in patients with peptic stricture is attributed to a decreased luminal diameter, coexistent esophagitis may be an equally important cause. The goals of this study were to determine whether medical healing of esophagitis in patients with stricture improves dysphagia and decreases dilatation need and to compare the efficacy and costeffectiveness of omeprazole versus H2-receptor antagonists (H2RA). Methods: Thirty-four dysphagic patients with peptic stricture and erosive esophagitis were dilated and randomized to omeprazole 20 mg every day versus H2RA (ranitidine 150 mg twice daily or famotidine 20 mg twice daily). Patients received further dilatations only if dysphagia frequency was greater than or equal to once per week. At 3 and 6 months, patients were assessed for esophagitis healing, dysphagia relief, and bougienage requirements. Cost-effectiveness of omeprazole and H2RA was determined. Results: Patients with healed esophagitis at 3 and 6 months were more likely to be dysphagia-free and to require fewer dilatations than patients with persistent esophagitis. At 6 months, omeprazole produced a significantly (P < 0.01) higher rate of esophagitis healing, dysphagia relief, and fewer dilatations compared with H2RA. Omeprazole was also 40%-50% more cost-effective. Conclusions: Esophagitis healing improves dysphagia and decreases dilatation need in patients with peptic stricture. Omeprazole heals esophagitis and relieves dysphagia more efficaciously than H2RA while decreasing costs to patients. © 1994.