There are more than 120 cardiac surgery programs in California. More than half perform less than 200 coronary artery bypass graft (CABG) procedures per year. This study queried the state of California discharge abstract database to analyze the relationship between annual procedural volume and outcomes of all 119 nonfederal hospitals performing cardiac surgery during 1997 through 1999. Unadjusted in-hospital mortality for CABG surgery was 3.91 per cent (923 of 23,619) in hospitals performing fewer than 200 procedures per year and 2.09 per cent (496 of 23,704) in hospitals performing > or = 500 procedures annually (P = 0.001 by Chi-square). Similar findings were noted for CABG + valve and/or aneurysm and for valve procedures. Risk-adjusted CABG data obtained from 78 of 119 hospitals found that a significant difference persisted between a volume of < 200 and > or = 200 procedures per year (P = 0.03 by t test). There was wider variation in outcome among lower-volume hospitals. However, many low-volume providers had excellent results. It is concluded that although volume is clearly related to outcome patient-related factors and process variables may be more important. Performance improvement programs should be developed to improve communication between providers with differing outcomes.