Aims/hypothesis This study aims to evaluate the costeffectiveness of a screening programme for pre-diabetes, which was followed up by treatment with pharmaceutical interventions (acarbose, metformin, orlistat) or lifestyle interventions (diet, exercise, diet and exercise) in order to prevent or slow the onset of diabetes in those at high risk. Methods To approximate the experience of individuals with pre-diabetes in the Australian population, we used a microsimulation approach, following patient progression through diabetes, cardiovascular disease and renal failure. The model compares costs and disability-adjusted life years lived in people identified through an opportunistic screening programme for each intervention compared with a 'do nothing' scenario, which is representative of current practice. It is assumed that the effect of a lifestyle change will decay by 10% per year, while the effect of a pharmaceutical intervention remains constant throughout use. Results The most cost-effective intervention options are diet and exercise combined, with a cost-effectiveness ratio of AUD 22,500 per disability-adjusted life year (DALY) averted, and metformin with a cost-effectiveness ratio of AUD 21,500 per DALY averted. The incremental addition of one intervention to the other is not cost-effective. Conclusions/interpretation Screening for pre-diabetes followed by diet and exercise, or metformin treatment is costeffective and should be considered for incorporation into current practice. The number of dietitians and exercise physiologists needed to deliver such lifestyle change interventions will need to be increased to appropriately support the intervention.