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To document trends in the price, purity, availability and use of heroin in New South Wales detected by the Illicit Drug Reporting System (IDRS) between 1996 and 2000, and to demonstrate the utility of the IDRS in identifying such trends.The IDRS compares information derived from interviews with injecting drug users, key informants who work in the illicit drugs field, and key indicator data on illicit drug trends.New South Wales, Australia.The price of heroin approximately halved over this period, from a median of A$400 per gram in 1996 to A$220 per gram in 2000. While the price of heroin fell dramatically over the study period, the purity of police seizures of the drug was high across all years, ranging between 62% and 71%. In all years heroin was considered easy to obtain by both heroin users who purchased the drug, and by key informants from the law enforcement and health fields. Concurrent with the large fall in heroin prices, there appeared to have been an increase in the number of heroin users. Between 1997 and 1998 there was a sharp increase in the injecting use of cocaine by heroin users in NSW, a pattern that has persisted.Regular and formal monitoring of illicit drug trends provides timely data in a systematic way to inform health and law enforcement policies towards current and emerging illicit drug problems.