There is considerable confusion in the literature about the entity of nonulcer dyspepsia and its epidemiology, mechanisms, and management. In this review, we discuss the mechanisms and develop a strategy for diagnosis and management of nonulcer dyspepsia in the era of cost-containment. This analysis was based on a computerized literature search on epidemiology, pathophysiology, and management of nonulcer dyspepsia. Inconsistencies in the inclusion criteria of several studies result in disparities in the data from epidemiological and physiology-based studies. We propose that the inclusion criteria need to be unrestricted by the symptom of "pain," and that epidemiological features must be refined further because recent data used pain/discomfort as the dominant feature for identifying "dyspepsia." The interplay between three factors (impaired motor and sensory functions, psychosocial factors, and Helicobacter pylori infection) deserves further study. Advances in this field will follow rigorous reappraisal of the epidemiology using an unrestricted definition of the symptom complex and development of strategies in clinical practice that focus on either the cost-effective investigation of the mechanism and its treatment or an effective sequence of therapeutic trials. An algorithm proposed for patient evaluation needs to be tested, with emphasis on outcome (i.e., symptom control, cost efficacy, and societal costs).