Isoniazid chemoprophylaxis effectively prevents the development of active infectious tuberculosis. Current guidelines recommend withholding this prophylaxis for low-risk tuberculin reactors older than 35 years of age because of the risk for fatal isoniazid-induced hepatitis. However, recent studies have shown that monitoring for hepatotoxicity can significantly reduce the risk for isoniazid-related death. To evaluate the effectiveness and cost-effectiveness of monitored isoniazid prophylaxis for low-risk tuberculin reactors older than 35 years of age. A Markov model was used to compare the health and economic outcomes of prescribing or withholding a course of prophylaxis for low-risk reactors 35, 50, or 70 years of age. Subsequent analyses evaluated costs and benefits when the effect of transmission of Mycobacterium tuberculosis to contacts was included. Probability of survival at 1 year, number needed to treat, life expectancy, and cost per year of life gained for individual persons and total population. Isoniazid prophylaxis increased the probability of survival at 1 year and for all subsequent years. For 35-year-old, 50-year-old, and 70-year-old tuberculin reactors, life expectancy increased by 4.9 days, 4.7 days, and 3.1 days, respectively, and costs per person decreased by $101, $69, and $11, respectively. When the effect of secondary transmission to contacts was included, the gains in life expectancy per person receiving prophylaxis were 10.0 days for 35-year-old reactors, 9.0 days for 50-year-old reactors, and 6.0 days for 70-year-old reactors. Costs per person for these cohorts decreased by $259, $203, and $100, respectively. The magnitude of the benefit of isoniazid prophylaxis is moderately sensitive to the effect of isoniazid on quality of life. The hypothetical provision of isoniazid prophylaxis for all low-risk reactors older than 35 years of age in the U.S. population could prevent 35 176 deaths and save $2.11 billion. Monitored isoniazid prophylaxis reduces mortality rates and health care costs for low-risk tuberculin reactors older than 35 years of age, although reductions for individual patients are small. For the U.S. population, however, the potential health benefits and economic savings resulting from wider use of monitored isoniazid prophylaxis are substantial. We should consider expanding current recommendations to include prophylaxis for tuberculin reactors of all ages with no contraindications.