In this decision-model analysis, the authors compared overall clinical efficacy and total cost of empiric treatment of hospitalized cellulitis patients prescribed linezolid and oxacillin or vancomycin. The authors hypothesized that, when used appropriately, empiric linezolid treatment is an effective, potentially cost-saving antibiotic compared with treatment initiated with oxacillin or vancomycin. Data on efficacy, duration of antibiotic treatment, and hospital stay for first-line treatment success were obtained from two clinical trials. Other medical resource use data were obtained from an expert panel of clinicians. US hospital direct medical costs were determined using standard costing techniques. Overall efficacy and total cost of treatment were estimated for combinations of the risk of being infected with methicillin-resistant pathogens. Sensitivity analyses were performed to test the impact of changes in major assumptions. Overall first-line efficacy is better for empiric treatment initiated with linezolid than with oxacillin or vancomycin across the spectrum of the risk of being infected with methicillin-resistant bacteria. The average total cost of treatment is lower for treatment initiated with linezolid than with vancomycin across the spectrum, or than with oxacillin when the risk of being infected with methicillin-resistant pathogens is 18.7 % or higher. Linezolid appears to be at least as effective as vancomycin or oxacillin for empiric treatment of hospitalized cellulitis patients. Linezolid is likely to be less costly compared with vancomycin at all resistance rates and with oxacillin when the risk of infection with methicillin-resistant pathogens is greater than 18.7 %, a resistance rate commonly seen in US hospitals.