In July 1997, telemedicine services were established for two islands, Procida and Ischia, in the Bay of Naples. The telemedicine network allowed a 24 h consultation service to be provided between the islands' health centres and mainland hospitals in the towns of Pozzuoli and Giugliano. Realtime videoconferencing was used, over an ISDN link at 384 kbit/s; radiographs were digitized using a scanner. During 1999 and 2000, there was an average of 46 telemedicine consultations per year from Procida (60% radiology, 30% cardiology, 10% other), 35% of which were emergencies, and 16 training sessions per year; there was an average of 28 telemedicine consultations per year from Ischia (80% radiology, 10% cardiology, 10% other), 10% of which were emergencies, and 12 training sessions per year. The average duration of a telemedicine consultation was 15 min. The total fixed cost of the telemedicine system between the two islands and the two mainland hospitals was approximately Euro 48,000 per year. The total variable costs of the telemedicine service at the observed workload were about Euro 750 per year. The total savings due to telemedicine were approximately Euro 40,000 per year. There was therefore little difference in the overall costs of health-care delivery. The positive consequences of the introduction of the telemedicine service included more rapid diagnosis and treatment, improved quality of service, and the transfer of skills and education. A costs-consequences analysis suggested that the telemedicine service was worthwhile.