The exercise electrocardiogram has been the subject of intense research over the last 50 years, as both a diagnostic and prognostic method to assess patients with chronic ischemic heart disease. In 1986, the strengths and limitations of the technique to predict coronary and multivessel disease in clinical patient subsets are understood. The diagnostic accuracy of the test is improved by consideration of Bayesian theory, multivariate models and new non-ST segment criteria. Post-test coronary disease risk estimates are best reported in terms of a conditional probability, rather than statements of "positive" or "negative." The value of exercise testing in prognostic risk stratification is considerably enhanced by recent reports of long-term follow-up data in asymptomatic and symptomatic patients. Powerful prognostic information can be obtained when the clinical, electrocardiographic and physiologic data from the exercise test are used to formulate the post-test risk of a cardiac event, even in patients whose coronary anatomy is known. The changing role of the exercise electrocardiogram as a diagnostic and prognostic test is reviewed, with emphasis on the strengths and limitations of the procedure.