To conduct a cost-effectiveness analysis of IV-to-oral regimens of azithromycin vs cefuroxime with or without erythromycin in the treatment of patients hospitalized with community-acquired pneumonia (CAP). Of the 268 evaluable patients enrolled into a randomized, multicenter clinical trial of adults, 266 patients had sufficient data to be included in this cost-effectiveness analysis. One hundred thirty-six patients received azithromycin, and 130 patients received cefuroxime with or without erythromycin. A pharmacoeconomic analysis from the hospital provider perspective was conducted. Health-care resource utilization was extracted from the clinical database and converted to national reference costs. Decision analysis was used to structure and characterize outcomes. Sensitivity analyses were performed, and statistics were applied to the cost-effectiveness ratios. The clinical success and adverse event rates and antibiotic-related length of stay were 78%, 11.8%, and 5.8 days for the azithromycin group and 75%, 20.7%, and 6.4 days for the group receiving cefuroxime with or without erythromycin, respectively. Geometric mean treatment costs were 4,104 US dollars (95% confidence interval [CI], 3,874 to 4,334 US dollars) for the azithromycin group, and 4,578 US dollars (95% CI, 4,319 to 4,837 US dollars) for the group receiving cefuroxime with or without erythromycin (p = 0.06). The cost-effectiveness ratios were 5,265 US dollars per expected cure for the azithromycin group, and 6,145 US dollars per expected cure for group receiving cefuroxime with or without erythromycin (p = 0.05). Despite a higher per-dose purchase price, overall costs with azithromycin tended to be lower due to decreased duration of therapy, lower preparation and administration costs, and reduced hospital length of stay. As empiric therapy, azithromycin monotherapy was cost-effective compared to cefuroxime with or without erythromycin for patients hospitalized with CAP who have no underlying cardiopulmonary disease, and no risk factors for either drug-resistant pneumococci or enteric Gram-negative pathogens.