Objectives To determine the health benefit of elbasvir/grazoprevir versus peginterferon combing with ribavirin (PR regimen) for Chinese chronic hepatitis C patients with genotype 1b infection. Methods Markov cohort state-transition models were constructed to conduct cost utility analysis. Sensitivity analyses were performed based on base-case analysis. Results Elbasvir/grazoprevir was dominant versus PR, resulting in higher QALYs and lower costs for both noncirrhotic patients (13.867 5 QALYs, 82 090.82 RMB vs. 12.696 2 QALYs, 122 791.55 RMB) and cirrhotic patients (12.841 6 QALYs, 225 807.70 RMB vs. 8.892 4 QALYs, 326 545.01 RMB). Elbasvir/grazoprevir was economically dominant in nearly 100% among all patients within the range of threshold from 0 to 161 805 RMB/QALY. Conclusions Elbasvir/grazoprevir was dominant in treatment of genotype 1b chronic hepatitis C infection in China.