Purpose Adenoid hypertrophy (AH) is common among young children. Adenoid-based surgery and drug therapy could be applied for symptomatic AH patients, yet the treatment decision is difficult to make due to the diverse cost and efficacy between these two treatments. Methods A Markov simulation model was designed to estimate the cost-effectiveness (CE) of the adenoid-based surgery and the drug therapy for symptomatic AH patients. Transition probabilities, costs and utilities were extracted from early researches and expert opinions. Simulations using two set of parameter inputs for China and the USA were performed. Primary outcome was cost per QALY gained over a 6-year period. Deterministic and probabilistic sensitivity analyses were also conducted. Results The utility for the surgery group and the drug group were 4.10 quality-adjusted life years (QALYs) and 3.58 QALYs, respectively. The cost of the surgery group was more than that of the drug group using model parameters specific to China