Laparoscopic cholecystectomy has become the most widely used treatment for gallbladder disease. In HMO, Medicare, and fee-for-service settings, cholecystectomy rates increased 28% to 59% after introduction of laparoscopic cholecystectomy. To investigate the impact of the introduction of laparoscopic cholecystectomy on cholecystectomy rates and the operative mortality rate in Veterans Affairs (VA) hospitals. Sequential cross-sectional study. All patients who underwent cholecystectomy from 1991 (before introduction of laparoscopic cholecystectomy) to 1995. 133 VA hospitals. Cholecystectomy rates, use of laparoscopic or open cholecystectomy, and operative mortality rate. The annual number of cholecystectomies in the VA system increased by 10% from 1991 to 1995; the laparoscopic procedure accounted for 25% of the caseload in 1992 and 52% in 1995. Compared with patients having laparoscopic cholecystectomy, those having open cholecystectomy were more likely to be older, be male, and have acute cholecystitis or comorbid illnesses (P < 0.001). The operative mortality rate of open cholecystectomy increased by 46% during this 4-year period (from 2.4% to 3.4%) and was constant for laparoscopic cholecystectomy (about 0.5%). Given the increasing use of the laparoscopic procedure, however, the overall mortality rate of cholecystectomy during surgery decreased by 22% (from 2.4% to 1.8%). Despite increased use of the surgery, the absolute number of deaths decreased by 9%. The introduction of laparoscopic cholecystectomy in the VA system was not accompanied by a large increase in cholecystectomy rates, as it was in fee-for-service, Medicare, and HMO systems. Because the rate of operations has changed only slightly, the total number of cholecystectomy-related deaths has decreased.