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An evaluation of treatment practices in 13 countries, not including the United States, has shown oral terbinafine to be more cost-effective (from a government payer perspective) than griseofulvin, itraconazole, and ketoconazole in the treatment of onychomycosis of toenails and fingernails. The purpose of this study was to evaluate the clinical and economic effects of oral griseofulvin, itraconazole, ketoconazole, and terbinafine in the treatment of onychomycosis from the perspective of a third-party payer in the United States. A previously constructed decision-analytic model evaluating the costs of onychomycosis in 13 countries outside the United States was updated to determine the costs of treating onychomycosis in the United States. Clinical management patterns were assessed to identify and quantify physician visits, laboratory tests, and adverse drug reaction treatment components for patients with toenail and fingernail onychomycosis. A random-effects model meta-analysis of treatment efficacy (mycologic cure) and New York Metropolitan Medicare charge data for physician fees were used in the treatment model. A sensitivity analysis assessing alternative dosing regimens and a rank order stability analysis investigating the effects of length of treatment, success rates, relapse rates, and drug acquisition costs on overall results were also conducted. Terbinafine had the lowest cost per mycologic cure after one treatment regimen for onychomycosis in both toenail and fingernail infections ($791.00 and $454.00, respectively). The costs of treating toenail and fingernail infections were comparatively higher for therapy with itraconazole ($1535.00 and $767.00, respectively), griseofulvin ($2385.00 and $837.00, respectively), and ketoconazole ($10,025.00 and $1512.00, respectively). As a primary treatment choice, terbinafine also had the lowest overall expected cost per patient for both toenail and fingernail infections ($977.00 and $550.00, respectively). Griseofulvin had expected costs ($1543.00 and $822.00, respectively) similar to itraconazole ($1588.00 and $894.00, respectively), whereas ketoconazole was the most expensive primary treatment choice ($2359.00 and $1287.00, respectively). This study demonstrates that terbinafine is an economical and cost-effective treatment for patients with dermatophytic onychomycosis, supporting European and Canadian studies. Except for the rank order of griseofulvin and itraconazole, sensitivity analyses show that these results are fairly stable.