© 2016 Permsuwan et al. Background: The management of type 2 diabetes mellitus (T2DM) in elderly population poses many challenges. Dipeptidyl peptidase-4 (DPP-4) inhibitors show particular promise due to excellent tolerability profiles, low risk of hypoglycemia, and little effect on body weight. This study evaluated, from the health care system’s perspective, the long-term cost-effectiveness of DPP-4 inhibitor monotherapy vs metformin and sulfonylurea (SFU) monotherapy in Thai elderly T2DM patients. Methods: The clinical efficacy was estimated from a systematic review and meta-analysis. Baseline cohort characteristics and cost parameters were obtained from published studies and hospital databases in Thailand. A validated IMS CORE Diabetes Model version 8.5 was used to project clinical and economic outcomes over a lifetime horizon using a 3% annual discount rate. Costs were expressed in 2014 Thai Baht (THB) (US dollar value). Incremental cost-effectiveness ratios were calculated. Base-case assumptions were assessed through several sensitivity analyses. Results: For treating elderly T2DM patients, DPP-4 inhibitors were more expensive and less effective, ie, a dominated strategy, than the metformin monotherapy. Compared with SFU, treatment with DPP-4 inhibitors gained 0.031 more quality-adjusted life years (QALYs) at a total cost incurred over THB113,701 or US$3,449.67, resulting in an incremental cost-effectiveness ratio of THB3.63 million or US$110,133.50 per QALY. At the acceptable Thai ceiling threshold of THB160,000/QALY (US$4,854.37/QALY), DPP-4 inhibitors were not a cost-effective treatment. Conclusion: DPP-4 inhibitor monotherapy is not a cost-effective treatment for elderly T2DM patients compared with metformin monotherapy and SFU monotherapy, given current resource constraints in Thailand.