Background: Low-risk papillary thyroid carcinoma is commonly treated surgically. However, uncertainties exist in regard to the optimal extent of surgery. We approached this question using a decision-analysis model. Methods: A Markov model was used to compare outcome between patients with small (1-2 cm) low-risk PTC treated by hemithyroidectomy or total thyroidectomy. Probabilities and utilities were derived from the literature. The model was evaluated with Monte Carlo simulation. Sensitivity analysis was used to determine which variables most affected the model. Results: Hemithyroidectomy was associated with a minor increase in mortality risk. After incorporation of mortality risk, complications, and quality-of-life measures, hemithyroidectomy was found to be superior to total thyroidectomy, with an increasing benefit over time. Quality-of-life measures, especially disutility of disease recurrence and undergoing surgery, had the greatest effect on the incremental benefit of hemithyroidectomy. Conclusion: Based on our decision-analysis model, hemithyroidectomy is the preferred option in low-risk PTC.