The last decade has seen a renewed interest in Sen's capability approach; health economists have been instrumental in leading much of this work. One particular stream of research is the application of the approach to outcome measurement. To date, there have been a dozen attempts (some combined) to operationalise the approach, and produce an outcome measure that offers a broader evaluative space than health-related quality-of-life measures. Applications have so far been confined to public health, physical, mental health and social care interventions, but the capability approach could be of benefit to evaluations of pharmacotherapies and other technologies. This paper provides an introduction to the capability approach, reviews the measures that are available for use in an economic evaluation, including their current applications, and then concludes with a discussion of a number of issues that require further consideration before the approach is adopted more widely to inform resource allocation decisions.