Background: There are few published data concerning the economic impact of antibiotic prophylaxis prior to endoscopic retrograde cholangiopancreatography in the setting of biliary obstruction. Aim: To perform decision analysis to determine the costs of prophylaxis in patients undergoing endoscopic retrograde cholangiopancreatography for obstructive jaundice. Methods: A decision analysis model was constructed. The probability of biliary sepsis, death and endoscopic retrograde cholangiopancreatography complications was obtained from the medical literature and from a retrospective analysis of our own experience. Costs were obtained from Medicare reimbursement at our institution. The strategies evaluated were endoscopic retrograde cholangiopancreatography with and without single-dose antibiotic prophylaxis. We compared the total costs, number of episodes of cholangitis and deaths associated with each strategy. Results: Based on published data and the results of our retrospective analysis, the strategy of administering single-dose prophylactic antibiotics prior to endoscopic retrograde cholangiopancreatography in patients with obstructive jaundice resulted in lower total costs, fewer episodes of cholangitis and fewer deaths compared to a strategy of not administering antibiotics. The results were sensitive to the rates of cholangitis, cost of antibiotics and the cost of treating an episode of cholangitis. Conclusions: Antibiotic prophylaxis prior to endoscopic retrograde cholangiopancreatography results in fewer cases of cholangitis and is cost saving when compared to a strategy of no prophylaxis in patients with obstructive jaundice.