The use of intravenous (i.v.) proton pump inhibitors (PPI) before an endoscopy in upper-GI bleeding (UGIB) was shown to reduce the need of endoscopic therapy and shorten hospital stay. To investigate whether preemptive use of a PPI in UGIB is a cost-effective strategy. A decision analysis model that represents treatment pathways for patients with UGIB was constructed and structuralized by 30-day outcomes. Direct costs of medical treatment, diagnostic and therapeutic endoscopy, endoscopic re-treatment, surgery, and hospitalization were analyzed. Prince of Wales Hospital, Hong Kong. A total of 631 patients were recruited. Sixty patients (19.1%) in the PPI group and 90 patients (28.4%) in the placebo group required endoscopic hemostasis at index endoscopy. The primary measurements were cost-effectiveness ratios and incremental cost-effectiveness ratios (ICER) to avert endoscopic therapy between PPI and placebo treatment. Sensitivity analyses were conducted by varying the cost of endoscopy, hospitalization, the incidence rate of endoscopic therapy, and the proportion of bleeding peptic ulcers. The overall direct cost per patient was U.S. dollars (USD) $2813 for PPI treatment and USD $2948 for the placebo. A PPI reduced endoscopic therapy by 7.4% and resulted in a lower cost-effectiveness ratio per endoscopic therapy averted (USD $3561) than the placebo (USD $4117). The ICER value was USD -$1843, which indicated that preemptive PPI treatment is more effective and less costly for UGIB. When the proportions of patients with peptic ulcer bleeding were greater than 8.3%, the preemptive PPI treatment remained cost saving. Preemptive use of IV PPI before an endoscopy is a cost-effective strategy in the management of UGIB.