This article examines some of the key research and policy issues that are emerging as a result of recent analyses of regional variations in health care. The article presents a historical background to this important new field of health services' research, and indicates, using some Danish examples of research on hysterectomy, cholecystectomy, and prostatectomy, the relevance of this research to management and policy planning. Regional variations are not yet fully explained in terms of what causes them. What is clear and what is the primary focus of this article is that their very existence, whatever their explanation, creates a major challenge for the management and planning of future health services.