In the Seattle Prepaid Health Care Project, we studied medical records and claims information for all 97 children undergoing tonsillectomy and/or adenoidectomy in an independent practice plan from February 1971, through January 1975. Overall only 32 per cent of the procedures met commonly promulgated indications for surgery. Of 77 persons having one of these procedures performed because of recurrent pharyngeal or ear infections, 86 per cent did not meet the indications for surgery suggested by screening criteria adapted from model guidelines for PSRO use. The average number of episodes of illness was estimated to be 1.717/per year in the year prior to surgery using lenient assumptions. It is concluded that a major reduction in the frequency of these procedures would be effected by developing an audit strategy that assures the stated indications meet commonly recommended guidelines. The reduction in surgery would occur irrespective of the debate about the efficacy of these procedures.