Bipolar disorder (or manic depression) is a lifelong, severe and complex psychiatric illness characterized by recurrent episodes of depression and mania. The aim of this study is to explore the cost-effectiveness of quetiapine compared with other alternatives for the treatment of acute manic episodes in bipolar I disorder, with a specific focus on serious side effects. Four trials investigating quetiapine monotherapy and adjunctive therapy were performed to investigate the efficacy of quetiapine in patients with bipolar I disorder. Data were derived from The Netherlands Mental Health Survey and Incidence Study and used to construct a study population for the model. To assess the cost-effectiveness of quetiapine in the management of acute mania in bipolar I disorders, a discrete event simulation model of seven monotherapy and combination treatment options was developed. A comparison of the total costs demonstrates that all of the monotherapy options and placebo are more costly than the combination therapy options. The combinations of lithium with risperidone (euro2365) and with olanzapine (euro2429) are estimated to be less costly per patient than the combination of lithium with quetiapine (euro2555). A group of 10,000 patients switching from olanzepine/lithium to quetiapine/lithium would involve extra costs of euro1,260,000, but would prevent an estimated number of 362 serious side effects. Switching from risperidone/lithium to quetiapine/lithium would cost an additional euro1,900,000 and would prevent 1580 serious side effects. In terms of serious side effects, the combination of lithium/quetiapine was superior to the combination of lithium with olanzapine or risperidone. It must be considered whether the decreased likelihood of developing a severe side effect is worth the extra costs incurred with the combination of quetiapine/lithium.