We carried out a systematic review of recent telemedicine assessments to identify scientifically credible studies that included comparison with a non-telemedicine alternative and that reported administrative changes, patient outcomes or the results of an economic assessment. From 605 publications identified in the literature search, 44 papers met the selection criteria and were included in the review. Four other publications were identified through references cited in one of the retrieved papers and from a separate project to give a total of 48 papers for consideration, which referred to 42 telemedicine programmes and 46 studies. Some kind of economic analysis was included in 25 (52%) of the papers. In considering the studies, we used a quality appraisal approach that took account of both study design and study performance. For those studies that included an economic analysis, a further quality-scoring approach was applied to indicate how well the economic aspects had been addressed. Twenty-four of the studies were judged to be of high or good quality and 11 of fair to good quality but with some limitations. Seven studies were regarded as having limited validity and a further four as being unacceptable for decision makers. New evidence on the efficacy and effectiveness of telemedicine was given by studies on geriatric care, intensive care and some of those on home care. For a number of other applications, reports of clinical or economic benefits essentially confirmed previous findings. Although further useful clinical and economic outcomes data have been obtained for some telemedicine applications, good-quality studies are still scarce.