3D Image-guided brachytherapy (IGBT) is a significant advancement in locally advanced cervical cancer treatment. Prospective and retrospective data have shown improved local control and decreased morbidity with this technique. However, the cost-effectiveness of this approach, which requires additional resources including repetitive cross-sectional imaging, is not known. We performed a cost-effectiveness (C/E) analysis of IGBT compared to conventional (2D) brachytherapy in the treatment of locally-advanced cervical cancer. A Markov model using a 1-month cycle with a 3-year follow-up period after completion of treatment was constructed to model locally advanced cervical cancer treated with five fractions of high-dose rate brachytherapy. The model captured clinical parameters (including improvement in survival, local control and RTOG late Grade 3 and above complication rates), quality of life utility, and cost associated with IGBT and 2D brachytherapy. Model assumptions regarding clinical outcomes and quality of life utility were obtained through a comprehensive literature review. Cost was based on Medicare reimbursement in 2013. Strategies were compared using the incremental cost effectiveness ratio (ICER), and effectiveness was measured in quality-adjusted life years (QALYs). To account for uncertainty, one-way and Monte Carlo probabilistic sensitivity analyses were performed. Strategies were evaluated from the health care system perspective with a willingness-to-pay threshold of $50,000/QALY gained. The base cost of treatment for five fractions of IGBT and 2D brachytherapy was $21000 and $17000, respectively. In the base case analysis, the IGBT strategy cost $3555 more than 2D while gaining 0.16 QALYs, resulting in an ICER of $22,453 per QALY gained. In one-way sensitivity analyses, which varied all parameters individually, results were most sensitive to variation of treatment costs (range: ICER of -$4000 to $49000/QALY gained), but the ICER remained <$50,000/QALY gained if IGBT costs were <$25,400 (baseline $21,000). Variation of survival, local control, and complication rates were less influential. A Monte Carlo probabilistic sensitivity analysis, which varied all model parameters simultaneously 5000 times, demonstrated that IGBT was favored in 63% of model iterations at a $50,000/QALY gained threshold. IGBT for locally-advanced cervical cancer is a cost effective option compared to 2D brachytherapy based upon the ICER analysis. These findings were robust to variation of parameter values, both individually and collectively, supporting the routine use of IGBT in locally-advanced cervical cancer.