Seven-valent pneumococcal conjugate vaccine (PCV7) has been in routine use in the United States since 2000 and data have indicated direct and indirect effects of the vaccine. We simulated the effects of PCV7 on children vaccinated during 2000-2006, incorporating direct and indirect effects on incidence of invasive pneumococcal disease (IPD), hospitalized pneumonia and otitis media. Before accounting for indirect effects, PCV7 cost $201,000 per life-year saved. After incorporating indirect effects on IPD, cost per life-year saved was $10,400. The presence of modest additional indirect effects against hospitalized pneumonia and otitis media in children may have resulted in overall cost savings.