Given evidence that most smokers start smoking before the age of 18 and that smokers who start earlier in life are less likely to quit, policies that reduce or delay initiation could have a large impact on public health. Raising the legal minimum purchase age of cigarettes to 21 may be an effective way for states to reduce youth smoking by making it harder for teens to buy cigarettes from stores and by reducing the number of legal buyers they encounter in their normal social circles. To inform the ongoing debate over this policy option in California, this study provides an evaluation of the cost-effectiveness of raising the state's legal smoking age to 21. Costs and benefits were estimated from a societal perspective using a dynamic computer simulation model that simulates changes to the California population in age, composition, and smoking behavior over time. Secondary data for model parameters were obtained from publicly available sources. Population health impacts were estimated in terms of smoking prevalence and the change in cumulative quality-adjusted life years (QALYs) to the California population over a 50-year period. Economic impacts were measured in monetary terms for medical cost savings, cost of law enforcement, and cost of checking identification. Compared to a status quo simulation, raising the smoking age to 21 would result in a drop in teen (ages 14-17) smoking prevalence from 13.3% to 2.4% (82% reduction). The policy would generate no net costs, in fact saving the state and its inhabitants a total of $24 billion over the next 50 years with a gain of 1.47 million QALYs compared to status quo. This research should prove useful to California's policy makers as they contemplate legislation to raise the state's legal smoking age.