Objective To evaluate the cost-effectiveness of implementing a penicillin allergy assessment pathway (PAAP) versus usual care within the NHS. Design A decision tree analysis over a 5-year time-period, informed by a randomised controlled trial (RCT) of PAAP and systematic review. Value of information analysis was also conducted to estimate the value of conducting a new trial. Data sources Model inputs were informed by the ALABAMA RCT participants included in the primary analysis, 811 adults with penicillin allergy labels and recent antibiotic prescriptions, and data from published literature. Interventions Participants in the ALABAMA trial included in the primary analysis: PAAP (n=401) and usual care (n=410). Primary and secondary outcome measures Costs are presented in GBP (£) at 2022–2023 prices, quality-adjusted life years (QALYs), incremental cost-effectiveness ratio, incremental net monetary benefit (INMB), the probability of cost-effectiveness at the £20,000 and £30,000 per QALY threshold, and the cost effectiveness of a new follow-on trial. Results PAAP had incremental costs of £−83 (probability of cost saving 47.5%) and incremental QALYs of 0.036 (probability of positive benefits 47.5%). The INMBs (probability of cost-effectiveness) were £806 (48%) and £1167 (48%) under the decision thresholds of £20,000 and £30,000 per QALY, respectively. PAAP was more cost-effective among females, people aged >65 years, and more frequent antibiotic users. A new follow-on trial involving 1267 participants was estimated to cost £2.4 million and, by reducing uncertainty in the evidence, would avoid £19.6 million in costs of incorrect management decisions for eligible patients over the next 10 years. Conclusion The PAAP was considered cost-effective, but significant uncertainty remained. Future trials with adequate power and longer follow-up are needed to determine the most cost-effective models for penicillin allergy testing.