This report describes the findings of a randomized study of a new team approach to home care for homebound chronically or terminally ill elderly. The team includes a physician, nurse practitioner, and social worker delivering primary health care in the patient's home, including physician house calls. Weekly team conferences assure coordination of patient care. The team is available for emergency consultation through a 24-hour telephone service. The team physician attends to the patient during necessary hospitalizations. This approach was evaluated in a randomized experimental design study measuring its impact on health care utilization, functional changes in patients, and patient and caretaker satisfaction. The team patients had fewer hospitalizations, nursing home admissions, and outpatient visits than the controls. They were more often able to die at home, if this was their wish. As expected, they used more in-home services, measured in weighted cost figures; their overall cost was lower than their controls, but the difference was not statistically significant. Their functional abilities did not change differently from the controls, but they, and especially their informal caretakers in the home, expressed significantly higher satisfaction with the care received.