Since up to 45% of patients with atypical Papanicolaou smears have been shown to have significant pathology, women with persistent atypia are usually referred for colposcopy. This study evaluated the use of a new adjunctive screening test, speculoscopy, in selecting women with atypical Papanicolaou smears who would most benefit from referral for colposcopy. Both screening and referral patients were evaluated with the Papanicolaou smear, speculoscopy and colposcopy at 10 study centers. Biopsies were obtained from most women with positive colposcopy. The results in patients with atypical smears were used to perform a cost-benefit analysis of each of three management protocols. Using the results of speculoscopy to select women with atypical Papanicolaou smears for colposcopy provided a cost-effective alternative to performing colposcopy either on all women or on those with persistent atypia following treatment. Even when all women undergo speculoscopy at the time of screening, this protocol provides a cost savings of up to 24% and no significant loss of diagnostic accuracy. These data suggest that speculoscopy performed at the time of initial screening can accurately select women with atypical Papanicolaou smears who require colposcopy for diagnostic biopsy in a cost-effective manner.