Background: The aim of this study was to compare the cost-effectiveness of proton pump inhibitors (PPI) and ranitidine in gastroesophageal reflux disease (GERD) in Korea. Methods: We assessed the cost-effectiveness two ways. First, mean costs for the complete healing of one patient with GERD within one year were calculated. Second, Markov (state-transition) models were used to simulate a cohort of patients with GERD, taking one of following strategies for 5 years:1) PPI (rabeprazole 10 mg, omeprazole20 mg, or lansoprazole 30mg), 2) ranitidine 300mg per day. Data on healing rate, relapse rate, surgical complication rate, success rate of surgery were taken from the literature. Direct medical costs of each strategy and surgical complications were calculated. Health effects were expressed as quality-adjusted life years (QALYs). Sensitivity analyses using various ranges of probability of healing rates and costs were performed. Costs and health outcomes were discounted at a rate of 3% per year. Results: The mean costs for complete healing of one case within one year was ₩475,836 in PPI and ₩1,064,704 in ranitidine, respectively. In the base case analysis using Markov model, the treatment costs of PPI were ₩155,238 and ₩214,781 in ranitidine and the effects were 4.81 QALYs and 4.26 QALYs, respectively; PPI strategy was more effective and less costly than ranitidine strategy. The sensitivity analyses using varying ranges of probability, cost, discount rate and utility were robust. Conclusion: PPI was superior to ranitidine in terms of cost-effectiveness in the treatment of GERD.