Purpose: Trastuzumab therapy has been shown to benefit metastatic breast cancer patients whose tumors exhibit HER-2 protein overexpression or gene amplification. Several tests of varying accuracy and cost are available to identify candidates for trastuzumab. We estimated the cost-effectiveness of alternative HER-2 testing and trastuzumab treatment strategies. Patients and Methods: We performed a decision analysis using a state-transition model to simulate clinical practice in a hypothetical cohort of 65-year-old metastatic breast cancer patients. Outcomes were quality-adjusted life-years (QALYs), lifetime cost, and incremental cost-effectiveness ratio (ICER). Interventions included testing with the HercepTest (DAKO, Carpinteria, CA) immunohistochemical assay alone, fluorescence in situ hybridization (FISH) alone, and both tests, followed by trastuzumab and chemotherapy for patients with positive test results and chemotherapy alone for patients with negative test results. Results: In the base case, initial HercepTest with FISH confirmation of all positive results had an ICER of $125,000 per QALY gained. The incremental cost-effectiveness of initial FISH was $145,000 per QALY gained. Other strategies yielded the same or poorer effectiveness at a higher cost, or lower effectiveness at a lower cost, but with a less favorable ICER. These findings persisted under a range of assumptions, and only changes in test characteristics substantially altered results. Conclusion: It is more cost-effective to use FISH alone or as confirmation of all positive HercepTest results, rather than using FISH to confirm only weakly positive results or using HercepTest alone. When multiple tests are available to identify treatment candidates, test characteristics may have a substantial impact on the aggregate costs and effectiveness of treatment.