Summary We constructed a Markov microsimulation model among hypothetical cohorts of community-dwelling elderly osteoporotic Japanese women without prior hip or vertebral fractures over a lifetime horizon. Compared with weekly oral alendronate for 5 years, denosumab every 6 months for 5 years is cost-saving or cost-effective at a conventionally accepted threshold. Introduction The objective of the study was to examine the cost-effectiveness of subcutaneous denosumab every 6 months for 5 years compared with weekly oral alendronate for 5 years in Japan. Methods We calculated incremental cost-effectiveness ratios ICERs (2016 US dollars $ per quality-adjusted life year QALY), using a Markov microsimulation model among hypothetical cohorts of community-dwelling osteoporotic Japanese women without prior hip or vertebral fractures at various ages of therapy initiation (65, 70, 75, and 80 years) over a lifetime horizon from three perspectives: societal, healthcare sector, and government. Results Denosumab was cost-saving compared with alendronate at ages 75 and 80 years from any of the three perspectives. The ICERs of denosumab compared with alendronate were $25,700 and $5000 per QALY at ages 65 and 70 years from a societal perspective and did not exceed a willingness-to-pay of $50,000 per QALY from the other two perspectives. In deterministic sensitivity analyses, results were sensitive to changes in the effectiveness of denosumab for reducing hip fracture and clinical vertebral fracture and the rate ratio of non-persistence with denosumab compared to alendronate. In probabilistic sensitivity analyses, the probabilities of denosumab being cost-effective compared with alendronate were 89–100% at a willingness-to-pay of $50,000 per QALY. Conclusions Among community-dwelling elderly osteoporotic women in Japan, denosumab every 6 months for 5 years is cost-saving or cost-effective at a conventionally accepted threshold of willingness-to-pay at all ages examined, compared with weekly alendronate for 5 years. This study provides insight to clinicians and policymakers regarding the relative economic value of osteoporosis treatments in elderly women.