Objective The aim of the present study was to evaluate the effect of a high-speed telemonitoring project for older people with chronic disease in a regional Australian town. Participants' vital signs were monitored and triaged daily by a telehealth nurse. Methods A prospective, uncontrolled study design evaluated the effect of home-based telemonitoring on older people with chronic disease. Evaluation included surveys (including the Stanford Chronic Disease Self-Efficacy tool and the Self-Rated Health Questionnaire), self-reported health service use and interviews and focus groups exploring client experiences. Results Participants reported an improved understanding of their vital signs monitoring (48%) and consequently better self-management of health (48%) and that they were better informed (44%) and more confident (25%) to discuss health with their doctor. Patients also reported making medication changes (17%), positive dietary changes (34%) and increasing their physical activity (33%). Overall, patients' self-rated general health improved (mean (± s.d.) improvement 0.30±0.80; 95% confidence interval (CI) 0.16-0.45; 118 d.f.; P<0.001), with more participants reporting that their health is 'excellent' or 'very good' at the end of the trial. Patients also reported fewer doctor visits (P<0.001), fewer visits to the local hospital emergency department (P=0.021) and fewer non-local hospital admissions (P<0.001) compared with the preceding year. There was no significant reduction in local hospital admissions (P=0.171). Conclusions The findings of the present study suggest that telemonitoring with videoconferencing empowers older people to better understand and manage their own health, and is associated with improved health outcomes and reduced service use. Having regular, daily access to a Telehealth nurse reassured participants, and triggered changes to services and behaviour that are likely to have positively affected patient outcomes. What is known about this topic? Telehealth is increasingly being used in the care of older people with chronic conditions and can reduce health service use. Previous research has indicated that telehealth has the potential to provide patients with greater knowledge and understanding of their condition. What this paper adds? Our research demonstrates that older people with limited experience of technology can be taught to successfully use telehealth equipment. We observed regular contact with telehealth nurses enables health promoting behaviour messages to be tailored to patients' needs. What are the implications for practitioners? Providing older people with tailored health support alongside an understanding of vital signs readings can enhance self-efficacy.