This paper gives a detailed presentation of a computer model for evaluating the cost-effectiveness (CE) of hormone replacement therapy (HRT), describing the model's design, structure, and data requirements. The model needs data specified for costs, quality of life, risks, and mortality rates. As an illustration, the CE of HRT in Sweden is calculated. Two treatment strategies are evaluated for asymptomatic women: estrogen-only therapy and estrogen combined with a progestin. The model produces similar results compared with earlier studies. The CE ratios improve with the size of the risk reduction and generally with age. Further, estrogen-only therapy is associated with a lower cost per gained effectiveness unit compared with combined therapy. Uncertainty surrounding the long-term effects of HRT means that the CE estimates should be interpreted carefully. The model permits the inclusion of indirect costs and costs in added life-years, allowing the analysis to be made from a societal perspective, which is an improvement relative to previous studies.