Background: The National Lung Screening Trial (NLST) demonstrated that low-dose CT screening diminishes the risk of death among smokers. A cost-effectiveness analysis was undertaken in the context of the Canadian publically funded healthcare system. Methods: Microsimulation of CT screening was undertaken using the Cancer Risk Management Model, which incorporates demographic data, cancer risk factors, cancer registry data, diagnostic and treatment algorithms and health utilities. Simulations were performed at the individual level for a cohort incepted during the period 2012-2032. The criteria for the screen-eligible population, CT scan test characteristics, and screened cohort outcomes were derived from NLST and Canadian data. The baseline screening scenario was annual CT screening for ≥30 pack-year smokers, age 55 to 74. Simulation assumed 60% of the eligible population participates by 10 years, 70% adhere to the screening regimen, and smoking cessation rates are unchanged. One-way sensitivity analyses were performed. Costs and life-years lived were discounted at 3% annually. Results: Compared to no screening, annual screening results in incremental system costs of $2.97 billion (Cdn), 149,000 life-years saved (LYS) or 55,000 quality-adjusted life-years saved (QALYS), an incremental cost-effectiveness ratio (ICER) of $19,900/LYS, and $53,700/QALYS. With participation rates from 40% to 80%, ICER /QALYS remained within the range of $53,700 to $58,200. Increases in screening adherence from 50% through 90% increased the ICER /QALY from $50,400 to $58,800. Higher rates of smoking cessation led to improvements in ICER /QALY (150% of background cessation rate of 3.2-5.3%, $47,000; 200%, $41,500; 300%, $32,900). A system of biennial screening had a net cost of $1.81 billion, resulting in an ICER of $19,600 /LYS, and $54,800 /QALYS. Conclusions: Screening for lung cancer with low-dose CT scans could be cost-effective, but requires substantial system costs. The smoking cessation rate greatly impacts the ICER and a cessation program should be considered if screening is implemented. Compared to annual screening, biennial screening costs less and produces a similar ICER. Further analyses will be detailed.