The EU Directive on Waste Electrical and Electrical Equipment (WEEE) (2002/96/EC), to be implemented in stages from August 2004, attempts to tackle the growing quantity WEEE by making producers responsible for the costs of the collection and recycling of their products at the end of usable life. This is considered to give producers a financial incentive to reduce waste at source through eco-design. This link is, however, under-researched and little is known generally about the effectiveness of extended producer responsibility (EPR) and policies to promote it. This paper presents the findings of an exploratory study to address these important gaps in knowledge. Literature review was used to develop an analytical framework to explain the relationships between the drivers for eco-design and the role of policies to promote EPR. This was applied to eight case studies of firms from the European lighting sector. While quantitative data to confirm the link between EPR and eco-design were difficult to obtain, the case studies showed that EPR has had little effect on product development so far. Within the sector studied, most producers have been able to pass on incremental costs associated with EPR to customers with negligible effects on sales. This reflects perceptions in the lighting sector that, because demand for products is relatively price inelastic and the regulation affects all producers equally, EPR is unlikely to drive eco-design at least in the short run. The cases also showed that choice between individual and centrally provided waste recovery schemes rested on perceptions of relative costs and practicability. It was evident that other drivers, such as bans on hazardous substances, product declarations and supply chain pressures, were often more effective promoters of eco-design. Thus it seems a mix of policy measures is required rather than reliance on economic instruments alone.