We originally described the hospitalist model of inpatient care in 1996; since then, the model has experienced tremendous growth. This growth has important clinical, financial, educational, and policy implications. To review data regarding the effect of hospitalists on resource use, quality of care, satisfaction, and teaching; and to analyze the impact of hospitalists on the health care system and frame key issues facing the movement. We searched MEDLINE, BIOSIS, EMBASE, and the Cochrane Library from 1996 to September 2001 for studies comparing hospitalist care with an appropriate control group in terms of resource use, quality, or satisfaction outcomes. We extracted information regarding study design, nature of hospitalist and control groups, analytical strategies, and key outcomes. Most studies found that implementation of hospitalist programs was associated with significant reductions in resource use, usually measured as hospital costs (average decrease, 13.4%) or average length of stay (average decrease, 16.6%). The few studies that failed to demonstrate reductions usually used atypical control groups. Although several studies found improved outcomes, such as inpatient mortality and readmission rates, these results were inconsistent. Patient satisfaction was generally preserved, while limited data supported positive effects on teaching. Although concerns about inpatient-outpatient information transfer remain, recent physician surveys indicate general acceptance of the model. Empirical research supports the premise that hospitalists improve inpatient efficiency without harmful effects on quality or patient satisfaction. Education may be improved. In part catalyzed by these data, the clinical use of hospitalists is growing rapidly, and hospitalists are also assuming prominent roles as teachers, researchers, and quality leaders. The hospitalist field has now achieved many of the attributes of traditional medical specialties and seems destined to continue to grow.