Adjuvant tamoxifen therapy for 5 years reduces recurrence in hormone receptor positive, post-menopausal women with early breast cancer, but offers no advantage when prolonged to another 5 years, during which the risk of recurrence remains high. Treating patients, who remain disease-free after 5 years of tamoxifen, with letrozole significantly reduces recurrence, regardless of nodal status. This study evaluated the life-time cost-utility of extended adjuvant letrozole therapy in 62-year-old patients from a third-party payer perspective. A Markov model incorporated locoregional, contralateral, and metastatic recurrences. The comparator was placebo. Event rates were based on published trials. Utility values were taken from a clinical trial and published literature. Costs were obtained from published literature, provincial payment schedules, cancer agencies, and drug plans formularies. Resource use reflected Canadian treatment patterns. Robustness of the model was tested using deterministic and probabilistic sensitivity analyses. Extended adjuvant letrozole therapy of a cohort consisting of 50% node-negative and 50% node-positive patients prolonged their lives on average by 0.466 years or 0.267 quality-adjusted life years (QALYs) at an additional cost of Can$8,031 per patient, yielding an incremental cost-utility ratio (ICUR) of $34,058 per QALY. Letrozole was more cost-effective in node-positive than in node-negative patients (Can$26,553 vs Can$46,049 per QALY). Results were robust to variations in age, healthcare costs, and utilities. The degree of confidence that the cost per QALY would be below Can$50,000 reached 100% for node-positive and 77% for node-negative patients. Extended adjuvant letrozole is cost-effective in both node-negative and node-positive patients having ICURs below Can$50,000/QALY.