This study evaluates the costs and utilization burden associated with oral, branded second-generation antihistamines (BSGAs) compared with montelukast (MTLK) as first-choice treatment in newly diagnosed allergic rhinitis (AR) patients without asthma. We compared annual medical costs of illness and utilization changes from 1 year before index AR diagnosis to 1 year after for continuously enrolled AR patients initiating therapy with BSGA or MTLK. Multivariate regressions for each outcome variable adjusted for confounders including age, sex, geographic region, Charlson Comorbidity Index, RxRisk Score, 18 comorbidity groups, and payer type. Treatment selection bias was evaluated by propensity score with all covariates plus instrumental variables including physician type and likelihood of prescribing MTLK versus BSGA. Insurance claims data for the years 2003-2007 included AR patients in all regions of the United States. The final sample included 13,703 AR patients taking BSGAs (84%) or MTLK (16%). After confounder adjustment, MTLK patients experienced higher total medical costs ($1,542 versus $989), drug costs ($714 versus $477), AR drug costs ($474 versus $298), and outpatient visit costs ($480 versus $277) than BSGA patients (all values of p < 0.025). MTLK patients experienced higher total visits (0.96), AR outpatient visits (0.71), and comorbidity visits (0.12) than BSGA patients (all values of p < 0.01). MTLK patients were more likely to add additional AR therapy medications (MTLK, 43.2%; BSGA, 31.6%; p < 0.01). New AR patients prescribed MTLK as first-line medication therapy have higher medical costs and resource utilization than those prescribed first-line oral BSGAs. These differences persisted after adjustment for patient fixed effects, available confounders, and treatment propensity scores.