This study examined the relationship between levels of medical training and direct costs for 1,700 episodes of acute illness treated in ambulatory-care clinics. Faculty, family practice residents, and physician assistants were included as the providers. Total cost and four component costs were examined. An outcome was defined as good if the patient returned to his usual level of functioning after an acute illness episode. Average total cost per episode was not related to type of provider, but there were significant (P less than .05) differences among providers in laboratory and medication costs. Faculty and physician assistants produced higher costs, especially for patients who experienced bad outcomes. Both costs and percentage of good outcomes achieved were similar in first-, second-, and third-year residents.