Optimal pneumococcal polysaccharide vaccination (PPV) policy is unknown for cohorts aged > or =65 years. Using a Markov model, we estimated the cost-effectiveness of single- and multiple-dose PPV strategies in 65-, 75-, and 80-year-old cohorts. PPV at age 65 cost $26,100 per QALY (quality adjusted life years) gained. Vaccination at ages 75 and 80 cost $71,300-75,800 per QALY; revaccination strategies cost more. When prior vaccination and loss of vaccine effectiveness due to tolerance are assumed, cost-effectiveness ratios increase substantially. Single-dose PPV is worth considering in patients aged 65-80 from clinical and economic standpoints. Revaccination strategies for the elderly are less cost-effective, particularly when prior vaccination and vaccine tolerance are considered.