OBJECTIVES To inform strategic decisions on respiratory syncytial virus (RSV) vaccine development and identify critical endpoints likely to drive the vaccine's medical and economic impact. DESIGN A decision-analysis model populated using healthcare utilization data and costs from the literature; vaccine efficacy and duration based on assumptions. SETTING Vaccination in the physician office setting in the USA. PARTICIPANTS A hypothetical cohort of newborn infants. INTERVENTION Vaccination of children at low and high risk of respiratory sequelae with a theoretical RSV vaccine vs palivizumab prophylaxis for children at high risk. OUTCOME MEASURES Medical and economic value of RSV vaccination, including cost per quality adjusted life-year (QALY) gained. RESULTS Using base-case assumptions (efficacy 50% at birth; half-life 12 months), RSV vaccination would prevent 23,069 hospitalizations and 66 deaths per vaccinated birth cohort in the USA. Excluding vaccination costs, direct medical costs for RSV would reduce by $236 million, and income and productivity losses by $134 million. Assuming a vaccine cost per course similar to Rotarix® in the USA ($232 including administration fees), the cost per QALY gained would be $93,401 (95% CI: $65,815-$126,060) from the healthcare system perspective and $65,115 (95% CI: $41,003-$93,679) from the societal perspective. The net cost (healthcare system perspective) per life-year saved would be $216,120 (95% CI: $161,184-$263,981); the cost per hospitalization averted would be $19,172 (95% CI: $14,679-$22,093). Aside from efficacy, the vaccine's impact is sensitive to the start of protective immunity and the duration of protection. CONCLUSIONS Development of an RSV vaccine would substantially reduce inpatient hospitalizations and outpatient visits. It would also have an impact on infant mortality. To demonstrate the full medical and economic value of the vaccine, appropriate endpoints or endpoint surrogates for hospitalization, mortality, and total case reductions should be collected during vaccine development.