OBJECTIVES: To evaluate the economic impact of vaccination with the pneumococcal 7-valent conjugate vaccine (PCV7) in Brazil, Chile, and Uruguay. METHODS: A decision analytic model was constructed to compare pneumococcal vaccination of children 0-5 years old with no vaccination in Brazil, Chile, and Uruguay. Costs and health outcomes were analyzed from the societal perspective. Vaccine, demographic, epidemiologic, and cost data were incorporated into this economic analysis. RESULTS: At the rate of diphtheria-tetanus-pertussis (DTP) vaccine coverage and a vaccine price of US$ 53 per dose, PCV7 was projected to prevent 23 474 deaths per year in children under 5 years old in the three countries studied, thus averting 884 841 disability-adjusted life years (DALYs) yearly. To vaccinate the entire birth cohort of the three countries, total vaccine costs would be US$ 613.9 million. At US$ 53 per dose, the cost per DALY averted from a societal perspective would range from US$ 664 (Brazil) to US$ 2 019 (Chile). At a cost of US$ 10 per dose, vaccine cost is lower than the overall cost of illness averted (US$ 125 050 497 versus US$ 153 965 333), making it cost effective and cost-saving. CONCLUSIONS: The results of this study demonstrate that the incorporation of PCV7 vaccine at US$ 53 per dose confers health benefits at extra costs. It is unclear whether vaccination at the current price is affordable to these countries.