We conducted a systematic review of the literature to evaluate the efficacy of telemedicine for making diagnostic and management decisions in three classes of application: office/hospital-based, store-and-forward, and home-based telemedicine. We searched the MEDLINE, EMBASE, CINAHL and HealthSTAR databases and printed resources, and interviewed investigators in the field. We excluded studies where the service did not historically require face-to-face encounters (e.g. radiology or pathology diagnosis). A total of 58 articles met the inclusion criteria. The articles were summarized and graded for the quality and direction of the evidence. There were very few high-quality studies. The strongest evidence for the efficacy of telemedicine for diagnostic and management decisions came from the specialties of psychiatry and dermatology. There was also reasonable evidence that general medical history and physical examinations performed via telemedicine had relatively good sensitivity and specificity. Other specialties in which some evidence for efficacy existed were cardiology and certain areas of ophthalmology. Despite the widespread use of telemedicine in most major medical specialties, there is strong evidence in only a few of them that the diagnostic and management decisions provided by telemedicine are comparable to face-to-face care.