For the prevention of recurrent esophageal variceal bleeding, studies show that patients treated with transjugular intrahepatic portosystemic shunt (TIPS) have lower rebleeding rates compared with endoscopic therapy. However, TIPS is associated with higher rates of portosystemic encephalopathy and possibly higher costs. The aim of this study was to conduct a cost-effectiveness analysis comparing TIPS with endoscopic sclerotherapy and endoscopic ligation for the prevention of recurrent esophageal variceal bleeding. Data for rates of rebleeding, death, complications, and crossover from endoscopy to TIPS were obtained from the literature. Costs for procedures and hospitalizations were obtained from two medical centers. Sensitivity analyses were performed varying probabilities of key variables. The patient population consisted of a hypothetical cohort of cirrhotic patients successfully treated for esophageal variceal bleeding with endoscopic sclerotherapy who received prophylactic sclerotherapy, ligation, or TIPS over 1 year. Endoscopic patients would receive propranolol. Mortality was similar for the three groups. The number of bleeds per patient for sclerotherapy, ligation, and TIPS would be 0.39, 0.32, and 0.07, respectively. The total annual costs per patient for sclerotherapy, ligation, and TIPS were $23,459, $23,111, and $26,275, respectively. The incremental cost per bleed prevented for TIPS compared with sclerotherapy and ligation was $8,803 and $12, 660, respectively. The incremental cost per bleed prevented for TIPS compared with sclerotherapy or ligation was sensitive to the cost of TIPS and the TIPS stenosis rate. Ligation had lower costs and lower recurrent bleeding rates than sclerotherapy. Compared with endoscopic therapy, TIPS leads to lower recurrent variceal bleeding rates and it is more cost effective in the short term for the prevention of recurrent esophageal variceal bleeding.