This article provides a frank discussion of the practical and ethical issues that emerged during the process of setting up and conducting a participant observation study within an inpatient hospice. A general overview of the participant observation approach is used to prefigure a discussion of its strengths and weaknesses when employed as a research and evaluation tool among palliative care populations. Although participant observation provided a flexible and viable means of collecting data in the hospice, it also created a number of dilemmas that in many cases could not be satisfactorily resolved. Difficulties arose, in particular, with obtaining informed consent from patients and assuming that consent remained valid after patients had deteriorated physically and mentally. Further complications stemmed from the role conflict and ambiguity inherent within an approach that requires a researcher to work simultaneously as a participant and as an observer.