Background. Although duplex ultrasound surveillance of patients after carotid endarterectomy (CEA) is routinely performed, the use of this policy has been questioned. We evaluated the cost-effectiveness of this strategy. Methods. Using a decision-analytic Markov model that depicts the natural history of patients after CEA, we compared a strategy of duplex ultrasound surveillance to a strategy of no surveillance. Probability estimates were derived from the literature and costs were obtained from the hospital's cost accounting system. Sensitivity analyses were performed to test the robustness and stability of our base-case conclusion to variations in the underlying assumptions. Results. Using baseline estimates we determined that duplex ultrasound surveillance after CEA reduced the incidence of stroke; however, this required significant additional expense, which resulted in an incremental cost-effectiveness ratio of $126, 950. This ratio could decrease tO a more acceptable level (less than $100,000) if a subset of patients could be identified whose rate of progression to greater than 80% Stenosis exceeded 6% per year or whose stroke rate associated with uncorrected asymptomatic stenosis exceeded 2.6% per year. Also, the cost-effectiveness ratio was reduced to less than $100,000 if patients were younger than 55 years old at the time of initial CEA or if the cost of CEA could be reduced to less than $7,000. Conclusions. Duplex ultrasound surveillance after CEA is associated with an unfavorable cost-effectiveness ratio. However, this strategy may be cost-effective in younger patients or in those patients who have a more progressive form of disease.