Purpose: A recent increase in the detection of contrast enhancing renal masses 4 cm or smaller suspicious for malignancy has led to the widespread use of nephron sparing options. Limited data exist to help clinicians decide which of these competing nephron sparing therapies is most appropriate. We performed a cost-effectiveness analysis to evaluate the relative clinical and economic merits of commonly available nephron sparing strategies for small renal masses., Materials and Methods: We developed a decision analytic Markov model estimating the costs and health outcomes of treating a healthy 65-year-old patient with an asymptomatic unilateral small renal mass using competing nephron sparing options of immediate intervention (ie open and laparoscopic partial nephrectomy as well as laparoscopic and percutaneous ablation), active surveillance with possible delayed intervention and nonsurgical management with observation. Benefits were measured in quality adjusted life-years. We used a societal perspective, lifetime horizon and willingness to pay threshold of $50,000 per quality adjusted life-year gained. Model results were assessed with sensitivity analyses., Results: In the base case scenario the least costly option was observation and the optimal option was immediate laparoscopic partial nephrectomy, which had an incremental cost-effectiveness ratio of $36,645 per quality adjusted life-year gained compared to surveillance with possible delayed percutaneous ablation. Results were sensitive to age at diagnosis, health status and tumor size., Conclusions: Immediate laparoscopic partial nephrectomy is the preferred nephron sparing option for healthy patients younger than 74 years old with a small renal mass. Surveillance with possible delayed percutaneous ablation is a cost-effective alternative for patients with advanced age or significant comorbidities. Observation maximizes quality adjusted life-years in patients who are poor surgical candidates or with limited life expectancy (less than 3 years)., (Copyright © 2011 American Urological Association Education and Research, Inc. Published by Elsevier Inc. All rights reserved.)