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Aims: The present analysis estimated the cost‐effectiveness of treatment with the Tandem t: slim X2 insulin pump with Control IQ technology (CIQ) in children with type 1 diabetes in Sweden. Methods: A four‐state Markov model and probabilistic sensitivity analyses (PSA) were used to assess the cost‐effectiveness of CIQ use compared with treatment with multiple daily insulin injections (MDI) or continuous subcutaneous insulin infusion (CSII) in conjunction with CGM. Data sources included clinical input data from a recent retrospective, observational study, cost data from local diabetes supply companies and government agencies, and published literature. Outcomes measures were quality adjusted life years (QALYs) at 10, 20 and 30‐year time horizons based on cost per QALY and incremental cost‐effectiveness ratio (ICER). Results: A total of 84 type 1 diabetes children were included (CIQ, n = 37; MDI, n = 19; CSII, n = 28). For all time horizons, the use of CIQ was a dominant strategy (e.g. more effective and less costly) compared with MDI or CSII use: 10‐year ICER, SEK ‐88,010.37 and SEK ‐91,723.92; 20‐year ICER, SEK −72,095.33 and SEK −87,707.79; and 30‐year ICER, SEK −65,573.01 and SEK ‐85,495.68, respectively. PSA confirmed that CIQ use was less costly compared with MDI and CSII. Conclusions: Initiation of CIQ use in children with type 1 diabetes is cost‐saving, besides previously shown improved glycaemic control, and increased quality of life. Further investigations are needed to more fully elucidate the cost‐effectiveness of these technologies in different countries with existing differences in payment models. [ABSTRACT FROM AUTHOR]