Abstract Background The aim was to perform an economic evaluation of the cost-effectiveness of endovascular enhancements to percutaneous transluminal balloon angioplasty (PTA) with bail-out bare metal stents for infrainguinal peripheral arterial disease. Methods The following interventions were considered: PTA with no bail-out stenting, PTA with bail-out drug-eluting stents, drug-coated balloons, primary bare metal stents, primary drug-eluting stents, endovascular brachytherapy, stent-grafts and cryoplasty. A discrete-event simulation model was developed to assess the relative cost-effectiveness of the interventions from a health service perspective over a lifetime. Populations of patients with intermittent claudication (IC) and critical leg ischaemia (CLI) were modelled separately. Univariable and probabilistic sensitivity analyses were undertaken. Effectiveness was measured by quality-adjusted life-years (QALYs). Results For both patient populations, the use of drug-coated balloons dominated all other options by having both lower lifetime costs and greater effectiveness. For willingness-to-pay thresholds between £0 and £100 000 per additional QALY, the probability of drug-coated balloons being cost-effective was at least 58·3 per cent for patients with IC and at least 72·2 per cent for patients with CLI. Sensitivity analyses showed that the results were robust to different assumptions regarding the clinical benefits attributable to the interventions. Conclusion The use of drug-coated balloons represents a cost-effective alternative to the use of PTA with bail-out bare metal stents.