We performed a cost analysis study using decision tree modeling to determine whether the use of multiplex PCR testing for respiratory viruses (xTAG RVP test) is a more or less costly strategy than the status quo testing methods used for the diagnosis of respiratory virus infections in pediatric patients. The decision tree model was constructed by using four testing strategies for respiratory virus detection, viz., direct fluorescent-antibody staining (DFA) alone, DFA plus shell vial culture (SVC), the xTAG RVP test alone, or DFA plus the xTAG RVP test. A review of the charts of 661 pediatric patients was used to determine the length of hospital stay, the number of days in isolation, antibiotic usage, and all other medical procedures performed. The cost of hospitalization by diagnostic status was determined on the basis of the average cost per patient and the number of patients in each arm of the decision tree. The cost per case was the highest for DFA plus SVC at $3,914 (in Canadian dollars), and the lowest was for the xTAG RVP test alone at $3,623, while the costs of DFA alone ($3,911) and DFA plus RVP ($3,849) were intermediate. When all four diagnostic strategies were compared, the least costly strategy was the xTAG RVP test alone when the prevalence of infection was 11% or higher and DFA alone when the prevalence was under 11%. These data indicate a savings of $291 per case investigated if the strategy of using the xTAG RVP test alone was used to replace the status quo test of DFA plus SVC, resulting in a savings of $529,620 per year in direct costs for the four Hamilton, Ontario, Canada, hospitals on the basis of the testing of specimens from 1,820 pediatric inpatients. We conclude that the use of the xTAG RVP test is the least costly strategy for the diagnosis of respiratory virus infections in children and would generate a significant savings for hospitals.