Kidney transplantation is the optimal therapy for end-stage renal disease, prolonging survival and reducing spending. Prior economic analyses of kidney transplantation, using Markov models, have generally assumed compatible, low-risk donors. The economic implications of transplantation with high Kidney Donor Profile Index (KDPI) deceased donors, ABO incompatible living donors, and HLA incompatible living donors have not been assessed. The costs of transplantation and dialysis were compared with the use of discrete event simulation over a 10-year period, with data from the United States Renal Data System, University HealthSystem Consortium, and literature review. Graft failure rates and expenditures were adjusted for donor characteristics. All transplantation options were associated with improved survival compared with dialysis (transplantation: 5.20-6.34 quality-adjusted life-years [QALYs] vs dialysis: 4.03 QALYs). Living donor and low-KDPI deceased donor transplantations were cost-saving compared with dialysis, while transplantations using high-KDPI deceased donor, ABO-incompatible or HLA-incompatible living donors were cost-effective (<$100 000 per QALY). Predicted costs per QALY range from $39 939 for HLA-compatible living donor transplantation to $80 486 for HLA-incompatible donors compared with $72 476 for dialysis. In conclusion, kidney transplantation is cost-effective across all donor types despite higher costs for marginal organs and innovative living donor practices.