The purpose of this study was to assess the cost-effectiveness of administeringan ACE-Inhibitor in NIDDM patients with microalbuminuria to delay progression ofdiabetic nephropathy. Markov models were used to determine lifetime medical costsand life expectancy in both conventional (without ACE-Inhibitors) and treatmentgroups using DATA TreeAGE software. Probability data were mainly derived from thestudy done by Ravid and colleagues. Medical costs including price and hemodialysiscost were based on medium government drug price, wholesale drug price, andhemodialysis cost from a previous study in Thailand. The main outcome measured wasthe incremental cost-effectiveness ratio, defined as changes in costs divided by thechange in life expectancy. The incremental cost-effectiveness ratios ofACE-Inhibitor therapy were cost savings 37,776.74 baht and 29,169.72 baht using mediumdrug price and wholesale drug price respectively. This study showed that anACE-Inhibitor has a favorable cost-effectiveness ratio for delaying progression ofdiabetic nephropathy in NIDDM patients. In addition, it is recommended that long-termstudies on the effects of ACE-Inhibitors in Thai population should be conducted.However, ACE-Inhibitors can be considered as part of the preventive treatment programto reduce costly renal complication from diabetes.