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Background: Patients with type 2 diabetes (T2D) typically use several drug treatments during their lifetime. There is a debate about the best second-line therapy after metformin monotherapy failure due to the increasing number of available antidiabetic drugs and the lack of comparative clinical trials of secondary treatment regimens. While prior research compared the cost-effectiveness of two alternative drugs, the literature assessing T2D treatment pathways is scarce. The purpose of this study was to evaluate the long-term cost-effectiveness of dipeptidyl peptidase-4 inhibitors (DPP-4i) compared to sulfonylureas (SU) as second-line therapy in combination with metformin in patients with T2D., Methods: A Markov model was developed with four health states, 1 year cycle, and a 25-year time horizon. Clinical and cost data were collected from previous studies and other readily available secondary data sources. The incremental cost-effectiveness ratio (ICER) was estimated from the US third party payer perspective. Both, costs and outcomes, were discounted at a 3% annual discount rate. One way and probabilistic sensitivity analyses were performed to evaluate the impact of uncertainty on the base-case results., Results: The discounted incremental cost of metformin+DPP-4i compared to metformin+SU was $11,849 and the incremental life-years gained were 0.61, resulting in an ICER of $19,420 per life-year gained for patients in the metformin+DPP-4i treatment pathway. The ICER estimated in the probabilistic sensitivity analysis was $19,980 per life-year gained. Sensitivity analyses showed that the results of the study were not sensitive to changes in the parameters used in base-case., Conclusions: The metformin+DPP-4i treatment pathway was cost-effective compared to metformin+SU as a long-term second-line therapy in the treatment of T2D from the US health care payer perspective. Study findings have the potential to provide clinicians and third party payers valuable evidence for the prescription and utilization of cost-effective second-line therapy after metformin monotherapy failure in the treatment of T2D.