From 1983 to 1990, 76 patients with pancreatic pseudocyst (PP) were managed. Computed tomographic scan (CT) was the primary diagnostic tool (88%). Ethanol accounted for 71 per cent and biliary disease 6 per cent of the occurrence of PP. Thirty-eight patients required surgery and 37 were managed nonoperatively. Forty-four PP complications occurred in 29 patients (4 bleeding, 1 ruptured, 13 gastric outlet obstruction, 10 infected, 6 hyperbilirubinemia, 5 pancreatic ascites, 5 pulmonary insufficiency) at a range of 1 day to 5 weeks from diagnosis; all but one occurred during initial hospitalization. Indications for surgery included complications,12 nonresolution or persistence of symptoms,18 and expansion.9 Internal drainage was accomplished in 40 per cent, (half within 4 weeks of diagnosis), 40 per cent underwent distal resection, and 15 per cent external drainage. There were two deaths in the series. Chronic pancreatitis, gallstone etiology, and gastric outlet obstruction significantly correlated with surgical management of the PP. Endoscopic retrograde cholangiopancreatography (ERCP) was helpful in planning the surgical procedure; 70 per cent of those undergoing ERCP had their operative plan altered. Percutaneous drainage failed in six of eight cases. The authors conclude that nonoperative management is safe and effective in 50 per cent of PP patients, if close radiographic follow-up is maintained until resolution.