Background: Surgical decortication is recommended by national guidelines for management of early empyema, but intrapleural fibrinolysis is frequently used as a first-line therapy in clinical practice. This study compared the cost-effectiveness of video-assisted thoracoscopic surgery (VATS) decortication with intrapleural fibrinolysis for early empyema. Methods: A decision analysis model was developed. The base clinical case was a 65-year-old man with early empyema treated either by VATS decortication or intrapleural tissue plasminogen activator and deoxyribonuclease. The likelihood of key outcomes occurring was derived from the literature. Medicare diagnosis-related groups and manufacturers’ drug prices were used for cost estimates. Successful treatment was defined as complete or nearly complete resolution of empyema on imaging. Effectiveness was defined as health utility 1 year after empyema. Results: Intrapleural tissue plasminogen activator and deoxyribonuclease were more cost-effective than VATS decortication for treating early empyema for the base clinical case. Surgical decortication had a slightly lower cost than fibrinolysis ($13,345 vs $13,965), but fibrinolysis had marginally higher effectiveness at 1 year (health utility of 0.80 vs 0.71). Therefore, fibrinolysis was the more cost-effective option. Sensitivity analyses found that fibrinolysis as the initial therapy was more cost-effective when the probability of success was greater than 60% or the initial cost was less than $13,000. Conclusions: Surgical decortication and intrapleural fibrinolysis have nearly equivalent cost-effectiveness for early empyema in patients who can tolerate both procedures. Surgeons should consider patient-specific factors, as well as the cost and effectiveness of both modalities, when deciding on an initial treatment for early empyema.