To evaluate the relative cost-effectiveness of radiofrequency (RF) ablation and hepatic resection in patients with metachronous liver metastases from colorectal carcinoma (CRC) and compare the outcomes, cost, and cost-effectiveness of a variety of treatment and follow-up strategies. A state-transition decision model for evaluating the (societal) cost-effectiveness of RF ablation and hepatic resection in patients with CRC liver metastases was developed. The model tracks the presence, number, size, location, growth, detection, and removal of up to 15 individual metastases in each patient. Survival, quality of life, and cost are predicted on the basis of disease extent. Imaging, ablation, and resection affect outcomes through detection and elimination of individual metastases. Several patient care strategies were developed and compared on the basis of cost, effectiveness, and incremental cost-effectiveness (expressed as dollars per quality-adjusted life-year [QALY]). Extensive sensitivity analysis was performed to evaluate the impact of alternative scenarios and assumptions on results. A strategy permitting ablation of up to five metastases with computed tomographic (CT) follow-up every 4 months resulted in a gain of 0.65 QALYs relative to a no-treat strategy, at an incremental cost of $2400 per QALY. Compared with this ablation strategy, a strategy permitting resection of up to four metastases, one repeat resection, and CT follow-up every 6 months resulted in an additional gain of 0.76 QALYs at an incremental cost of $24 300 per QALY. Across a range of model assumptions, more aggressive treatment strategies (ie, ablation or resection of more metastases, treatment of recurrent metastases, more frequent follow-up imaging) were superior to less aggressive strategies and had incremental cost-effectiveness ratios of less than $35 000 per QALY. Findings were insensitive to changes in most model parameters; however, results were somewhat sensitive to changes in size thresholds for RF ablation, the number of metastases present, and surgery and treatment costs. RF ablation is a cost-effective treatment option for patients with CRC liver metastases. However, in most scenarios, hepatic resection is more effective (in terms of QALYs gained) than RF ablation and has an incremental cost-effectiveness ratio of less than $35 000 per QALY.