Objective: To evaluate the cost-effectiveness of all 4 interventions in the Treatment of Early Aggressive Rheumatoid Arthritis (TEAR) clinical trial: immediate triple (IT), immediate etanercept (IE), step-up triple (ST), and step-up etanercept (SE). Step-up interventions started with methotrexate and added either etanercept or sulfasalazine plus hydroxychloroquine to patients with persistent disease activity. Methods: We built a Markov cohort model that uses individual-level data from the TEAR trial, published literature, and supplemental clinical data. Costs were in US dollars, benefits in quality-adjusted life years (QALYs), perspective was societal, and the time horizon was 5 years. Results: The immediate strategies were more efficacious than step-up strategies. SE and IE were more costly than ST and IT, primarily due to treatment cost differences. In addition, IT was the least expensive and most effective strategy when the time horizon was 1 and 2 years. When the time horizon was 5 years, IE was marginally more effective than IT (3.483 versus 3.476 QALYs), but IE was substantially more expensive than IT ($148,800 versus $52,600), producing an incremental cost-effectiveness ratio of $12.5 million per QALY. These results were robust to both one-way deterministic and joint probabilistic sensitivity analyses. Conclusion: IT was highly cost-effective in the majority of scenarios. Although IE was more effective in 5 years, a substantial reduction in the cost of biologic agents was required in order for IE to become cost-effective in early aggressive RA under willingness-to-pay thresholds that most health care settings may find acceptable.