The purpose of this study is to evaluate the effect of a clinical pathway for total knee arthroplasty in terms of length of stay, hospital costs, and quality of care. One hundred and twenty-two patients who underwent primary total knee arthroplasty for degenerative osteoarthritis in Kaohsiung Medical University hospital were included in the study. The pre-clinical pathway group included 53 patients before clinical pathway implementation (October 1996 approximately September 1997). The clinical pathway group included 69 patients after implementation of the clinical pathway (October 1997 approximately September 1998). All patients were followed up for at least 2 years after surgery. Data collection, including length of stay, hospital costs, comorbidity, and complications, was done by chart review, and Knee Society Clinical Rating System scores were used for assessment of preoperative and postoperative knee function for each group. Statistical analysis included Student's t-test to test the impact of the clinical pathway on resource consumption and medical care processes, and multiple linear regression to control for characteristics such as age and comorbidity. The implementation of the clinical pathway reduced the length of stay by 24%. Hospital costs were reduced by 16%. The implementation of the clinical pathway also reduced the number of unnecessary medical procedures. There was no statistically significant difference between the preoperative or the postoperative knee scores of the pre-clinical pathway group and clinical pathway group. The application of clinical pathway did not affect clinical outcomes and complication rates. In conclusion, the clinical pathway is an effective medical management tool to decrease the length of stay, decrease resource consumption and control medical care expenditure, and this is accomplished without a long-term adverse effect on quality of care.