Background: The management of acute Achilles tendon ruptures is controversial, and most injuries are treated with surgery in the USA. The cost utility of operative versus non-operative treatment of acute Achilles tendon injury is unclear. Questions/Purposes: The purpose of this study was to compare the cost-effectiveness of operative versus functional non-operative treatment of acute Achilles tendon ruptures. Methods: A Markov cost-utility analysis was conducted from the societal perspective using a 2-year time horizon. Hospital costs were derived from New York State billing data, and physician and rehabilitation costs were derived from the Medicare physician fee schedule. Indirect costs of missed work were calculated using estimates from the US Bureau of Labor Statistics. Rates of rerupture, major and minor complications, and the associated costs were obtained from the literature. Effectiveness was expressed in quality-adjusted life years (QALYs). For the base-case analysis, operative and non-operative patients were assumed to have the same utilities (quality of life) following surgery. Deterministic and probabilistic sensitivity analyses were conducted to evaluate the robustness of model assumptions. Results: In the base-case model, non-operative management of acute Achilles tendon ruptures dominated operative management, resulting in both lower costs and greater QALY gains. The differences in costs and effectiveness were relatively small. The benefit of non-operative treatment was 1.69 QALYs, and the benefit of operative treatment was 1.67 QALYs. Similarly, the total cost of operative and non-operative management was $13,936 versus $13,413, respectively. In sensitivity analyses, surgical costs and days of missed work were important drivers of cost-effectiveness. If hospitalization costs dropped below $2621 (compared with $3145) or the hourly wage rose above $29 (compared with $24), then operative treatment became a cost-effective strategy at the willingnessto-pay threshold of $50,000/QALY. The model results were also highly sensitive to the relative utilities for operative versus nonoperative treatment. If non-operative utilities decreased relative to operative utilities by just 2%, then operative management became the dominant treatment strategy. Conclusion: For acute Achilles tendon ruptures, non-operative treatment provided greater benefits and lower costs than operative management in the base case; however, surgical costs and the economic impact associated with return to work are important determinants of the preferred cost-effective strategy.