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Although Medicare claims data have been increasingly used to examine the patterns and outcomes of cancer chemotherapy, their external validity has not been well studied.We sought to validate Medicare claims for chemotherapy compared with medical chart reviews.We completed medical chart reviews for 1228 women who were diagnosed with breast cancer at age 65 and older between 1993 and 1999 in New Mexico that were linked with Medicare claims data, achieving an estimated sensitivity of more than 90% and a 0.05 level of precision.Of the 150 subjects identified by Medicare claims as receiving chemotherapy within 6 months of diagnosis, 75% were confirmed by medical records as having received chemotherapy. Of the remaining 25% of cases without chart verification, (1) 33 cases had 7 or more claims for chemotherapy and also had specific chemotherapy drugs indicated in Medicare data, representing 22% (33/150) of all cases that received chemotherapy according to Medicare claims and (2) 4 cases had 1 to 6 claims for chemotherapy, representing 3% (4/150) of all cases with claims for chemotherapy. Of those 1078 subjects who did not receive chemotherapy according to Medicare claims, more than 99% were confirmed by chart reviews. Observed agreement on chemotherapy between Medicare claims and chart reviews was 94% and overall reliability (kappa) was 0.69 (95% confidence interval = 0.63–0.76).Of cases identified as receiving chemotherapy by Medicare claims, 97% had strong evidence and only 3% had weak evidence for receiving this therapy.