BACKGROUND: The present study aims to evaluate the cost-effectiveness of the newly introduced varicella and herpes zoster (HZ) vaccination programmes in Italy. The appropriateness of the introduction of the varicella vaccine is highly debated because of concerns about the consequences on HZ epidemiology and the expected increase in the number of severe cases in case of suboptimal coverage levels. METHODS: We performed a cost-utility analysis based on a stochastic individual-based model that considers realistic demographic processes and two different underlying mechanisms of exogenous boosting (temporary and progressive immunity). Routine varicella vaccination is given with a two-dose schedule (15 months, 5-6 years). The HZ vaccine is offered to the elderly (65 years), either alone or in combination with an initial catch-up campaign (66-75 years). The main outcome measures are averted cases and deaths, costs per quality-adjusted life years gained, incremental cost-effectiveness ratios, and net monetary benefits associated with the different vaccination policies. RESULTS: Demographic processes have contributed to shaping varicella and HZ epidemiology over the years, decreasing varicella circulation and increasing the incidence of HZ. The recent introduction of varicella vaccination in Italy is expected to produce an enduring reduction in varicella incidence and, indirectly, a further increase of HZ incidence in the first decades, followed by a significant reduction in the long term. However, the concurrent introduction of routine HZ vaccination at 65 years of age is expected to mitigate this increase and, in the longer run, to reduce HZ burden to its minimum. From an economic perspective, all the considered policies are cost-effective, with the exception of varicella vaccination alone when considering a time horizon of 50 years. These results are robust to parameter uncertainties, to the two different hypotheses on the mechanism driving exogenous boosting, and to different demographic projection scenarios. CONCLUSIONS: The recent introduction of a combined varicella and HZ vaccination programme in Italy will produce significant reductions in the burden of both diseases and is found to be a cost-effective policy. This programme will counterbalance the increasing trend of zoster incidence purely due to demographic processes.