Since the late 1970's, an empirical relationship between the volume of procedures performed by a provider (a hospital or surgeon) and the outcome has been documented for various operations. The present study examines the relationship between the volume of hip replacements performed by surgeons and hospitals and the postoperative rate of complications. A statewide hospital discharge registry was used to identify patients who had had an elective hip replacement between 1988 and 1991. Patients who had had a revision procedure, who had been referred on an emergency basis, or who had had a diagnosis of a fracture or a malignant tumor on admission were excluded. There were 7936 eligible patients who had had 8774 hip replacements. The average annual number of all hip replacements performed from 1987 through 1991 was subsequently determined for each hospital and surgeon who had cared for at least one patient in the study cohort. The rate of operative complications was modeled as a function of the volume of procedures performed by the surgeon or hospital (the surgeon or hospital volume), with adjustment for the age of the patient, gender, co-morbidity, and operative diagnosis.We noted significant differences in the case mix of low-volume providers compared with that of high-volume providers (p < 0.01). In general, surgeons and hospitals with a volume below the fortieth percentile managed patients who had a more adverse risk profile in terms of age, co-morbidity, and diagnosis. Even after adjustment for the case mix, there was a significant relationship between surgeons who averaged fewer than two hip replacements annually (low-volume surgeons) and a worse outcome (p < 0.05). Patients managed by these low-volume surgeons tended to have higher mortality rates, more infections, higher rates of revision operations, and more serious complications during the index hospitalization. The duration of hospitalization was inversely related to surgeon volume and directly associated with hospital volume. Hospital charges were inversely related to hospital volume, even after adjustment for patient-related factors as well as the duration of hospitalization, the year of the operation, and the destination after discharge (p < 0.05).More detailed information is required to investigate the reason for these observed variations in the rates of complications. If future studies confirm an association between low-volume providers and an adverse outcome, performance of some types of elective total hip replacements at regional centers should be considered.