Background Nivolumab was the first programmed death receptor 1 (PD-1) immune checkpoint inhibitor to demonstrate long-term survival benefit in a clinical trial setting for advanced melanoma patients. Objective To evaluate the cost effectiveness of nivolumab monotherapy for the treatment of advanced melanoma patients in England. Methods A Markov state-transition model was developed to estimate the lifetime costs and benefits of nivolumab versus ipilimumab and dacarbazine for BRAF mutation-negative patients and versus ipilimumab, dabrafenib, and vemurafenib for BRAF mutation-positive patients. Covariate-adjusted parametric curves for time to progression, pre-progression survival, and post-progression survival were fitted based on patient-level data from two trials and long-term ipilimumab survival data. Indirect treatment comparisons between nivolumab, ipilimumab, and dacarbazine were informed by these covariate-adjusted parametric curves, controlling for differences in patient characteristics. Kaplan-Meier data from the literature were digitised and used to fit progression-free and overall survival curves for dabrafenib and vemurafenib. Patient utilities and resource use data were based on trial data or the literature. Patients are assumed to receive nivolumab until there is no further clinical benefit, assumed to be the first of progressive disease, unacceptable toxicity, or 2 years of treatment. Results Nivolumab is the most cost-effective treatment option in BRAF mutation-negative and mutation-positive patients, with incremental cost-effectiveness ratios of £24,483 and £17,362 per quality-adjusted life year, respectively. The model results are most sensitive to assumptions regarding treatment duration for nivolumab and the parameters of the fitted parametric survival curves. Conclusions Nivolumab is a cost-effective treatment for advanced melanoma patients in England.