ABSTRACT Background This study compares first-line pembrolizumab plus chemotherapy with chemotherapy alone for patients with HER2-negative advanced gastric cancer (GC) and gastroesophageal junction cancer (GEJC) in China. Methods A Markov state-transition model was developed based on the phase 3 randomized KEYNOTE-859 clinical trial data. The health state utility values and direct medical costs were derived from the KEYNOTE-859 clinical trial, the relevant literature, and local charges. The measured outcomes included quality-adjusted life-years (QALYs) and the incremental cost-effectiveness ratio (ICER). Probabilistic and one-way sensitivity analyses (OWSA) were performed to assess the uncertainty of the model. Results In the base analysis, the incremental effectiveness and cost of pembrolizumab plus chemotherapy versus chemotherapy alone were 0.22 QALYs and $16,627.31, respectively, resulting in an ICER of $76,936.60/QALY, which is higher than the willingness-to-pay threshold in China ($35,864.61/QALY). Subgroup analyses revealed that the ICERs of pembrolizumab plus chemotherapy versus chemotherapy alone were $72,762.68 and $34,813.70 in the populations with PD-L1 CPS of 1 or higher (CPS ≥ 1) and PD-L1 CPS ≥ 10 (CPS ≥ 10), respectively. Conclusions As first-line therapy for patients with locally advanced or metastatic HER2-negative GC/GEJC in China, pembrolizumab plus chemotherapy is less cost-effective than chemotherapy alone, however, in the CPS ≥ 10 subgroup is more.