For a type I diabetic with end-stage renal disease, the choice between a kidney-alone transplant from a living-donor (KA-LD) and a simultaneous pancreas kidney (SPK) transplant remains a difficult one. The prevailing practice seems to favor KA-LD over SPK, presumably due to the superior long-term renal graft survival in KA-LD and the elimination of the lengthy waiting time on the cadaver transplant list. In this study, two treatment options, KA-LD followed by pancreas-after-kidney (PAK) and SPK transplant, are compared using a cost-utility decision analysis model. The decision tree consisted of a choice between KA-LD + PAK and SPK. The analysis was based on a 5-yr model and the measures of outcome used in the model were cost, utility and cost-utility. The expected 5-yr cost was $277,638 for KA-LD + PAK and $288,466 for SPK. When adjusted for utilities, KA-LD + PAK at a cost of $153,911 was less cost-effective than SPK at a cost of $110,828 per quality-adjusted year. One-way sensitivity analyses were performed by varying patient and graft survival probabilities, utilities and cost. SPK remained the optimal strategy over KA-LD + PAK across all variations. Two-way sensitivity analysis showed that in order for KA-LD + PAK to be at least as cost-effective as SPK, 5-yr pancreas and patient survival rates following PAK would need to surpass 86 and 80%. In conclusion, according to the 5-yr cost-utility model presented in this study, KA-LD followed by PAK is less cost-effective than SPK as a treatment strategy for a type I diabetic with end-stage renal disease. For patients interested in the benefits of a pancreas transplant, it would be reasonable to offer SPK as the optimal treatment, even if a living kidney donor is available.