CONTEXT: Adherence to osteoporosis treatment is low. Although new therapies and behavioral interventions may improve medication adherence, questions are likely to arise regarding their cost-effectiveness. OBJECTIVE: Our objectives were to develop and validate a model to simulate the clinical outcomes and costs arising from various osteoporosis medication adherence patterns among women initiating bisphosphonate treatment and to estimate the cost-effectiveness of a hypothetical intervention to improve medication adherence. DESIGN: We constructed a computer simulation using estimates of fracture rates, bisphosphonate treatment effects, costs, and utilities for health states drawn from the published literature. Probabilities of transitioning on and off treatment were estimated from administrative claims data. SETTING AND PATIENTS: Patients were women initiating bisphosphonate therapy from the general community. INTERVENTION: We evaluated a hypothetical behavioral intervention to improve medication adherence. MAIN OUTCOME MEASURES: Changes in 10-yr fracture rates and incremental cost-effectiveness ratios were evaluated. RESULTS: A hypothetical intervention with a one-time cost of $250 and reducing bisphosphonate discontinuation by 30% had an incremental cost-effectiveness ratio (ICER) of $29,571 per quality-adjusted life year in 65-yr-old women initiating bisphosphonates. Although the ICER depended on patient age, intervention effectiveness, and intervention cost, the ICERs were less than $50,000 per quality-adjusted life year for the majority of intervention cost and effectiveness scenarios evaluated. Results were sensitive to bisphosphonate cost and effectiveness and assumptions about the rate at which intervention and treatment effects decline over time. CONCLUSIONS: Our results suggests that behavioral interventions to improve osteoporosis medication adherence will likely have favorable ICERs if their efficacy can be sustained.