The increased concern about the quality of medical services evidenced by, inter alia, the growing attention to quality of Peer Review Organizations. The purchasing and implementation of sophisticated medical data systems by hospitals, and the growing clamor from private health insurers and employers about the rapidly rising costs of health services has made determining the effectiveness of medical interventions a priority subject for many authorities in the field of medical care assessment. At the risk of oversimplification, the view that a greater focus on quality of health services is overdue has begun to energize healthcare institutions, the health professions, payers, and the general public. The objective of this paper and those that will follow is to examine medical peer review. Medical peer review involves peer appraisal in at least two stages: in criteria and standard setting (1, 2), and in determining whether criteria and standards have been met by practitioners in the rendering of services (2). This first article describes some difficulties with the information available to facilitate effective medical peer review, and examines the processes that provide the knowledge base upon which medical peer review depends.