This study is to compare the health-related quality of life (HRQoL) and cost-effectiveness of radiofrequency ablation (RFA) and open thyroidectomy (OT) for benign thyroid nodules (BTNs) treatment. HRQoL and utility were assessed for 404 BTN patients immediately before treatments (RFA:OT = 137:267) and at 6-month visit. A cost-effectiveness analysis was performed from societal perspective in the China context. Resource use (hospitalization, sick leaves) was collected. We used the net monetary benefit approach and computed cost-effectiveness acceptability curves for RFA and OT. Sensitivity analyses of costs of RFA were performed. At 6-month visit, patients treated with RFA had significantly better HRQoL than patients treated with OT on general health (68.5 versus 66.7, P = 0.029), vitality (71.3 versus 67.5, P < 0.001) and mental health (80.9 versus 79.3, P = 0.038). RFA was more effective than OT in terms of quality-adjusted life-years (QALYs; 0.01QALY/patient) but more expensive (US$823/patient). The probability that RFA would be cost effective at a US$50,000/QALY threshold was 15.5% in China, and it would be increased to 88.4% when price of the RFA device was lowered by 30%. RFA exhibited a significant improvement of HRQoL relative to OT, but is unlikely to be cost effective at its current price in short time.