BACKGROUND:Disease due to serogroup C Neisseria meningitidis is life-threatening and potentially preventable by vaccination. In 1999, the UK instigated mass vaccination after a sustained increase in serogroup C meningococcal disease. In the same year, Victoria, Australia experienced a similar change in disease epidemiology. It is timely to undertake an economic evaluation of options for community vaccination in Australia based on local data. METHODS:Cost-effectiveness and cost-benefit analyses of three options for use of polysaccharide vaccine were undertaken for a hypothetical population aged 15--19 years. Baseline analyses assumed 5 years' duration of vaccine protection following a single year of programme implementation. Sensitivity analyses of key variables were performed, including vaccine coverage and effectiveness, case fatality rate and the discount rate. Outcomes included the number of people vaccinated, cases averted, life-years saved and disability-adjusted life-years (DALY) averted. Cost-benefit analysis used lost earnings avoided as a measure of vaccination benefit. RESULTS:Vaccination of people aged 15--19 years in a defined population with a high rate of disease was the most cost-effective option. Compared with no vaccination and assuming 5 years' duration of protection and exclusion of direct cost savings, this resulted in a discounted cost per life-year saved of $23,623, a cost per DALY avoided of $21,097 and benefits exceeding costs in discounted terms. The 'break-even' incidence rate for this option with exclusion of direct cost savings was 14.0/100,000. CONCLUSIONS:Community use of polysaccharide vaccination may be cost effective in Australia under certain conditions. Economic evidence favours use of vaccination in well-defined populations with a high rate of disease. Policy decision-making also requires consideration of non-economic factors, including feasibility of implementation and risk perception by the community.