During a 12-month period, 20,838 patients with acute traumatic injuries were seen in the Emergency Department (ED) of Denver General Hospital. Of these patients, 520 (2.5%) were admitted to the ED Observation Unit, a seven-bed acute care unit situated within the ED and sufficient data were available on 485 (93%) for inclusion into the study. Fifty-three (15.4%) of these observation unit patients required subsequent admission, 389 (80%) were discharged, and 16 (4%) left against medical advice. There were no observation unit deaths. These groups of patients were analyzed and compared with regard to severity of injury, length of stay, and discharge diagnosis. The observation unit is useful in the evaluation of blunt chest or abdominal trauma when work-up, including chest x-ray studies and peritoneal lavage, is initially negative and when drug or alcohol ingestion obscures the initial evaluation in the ED. An observation unit within the ED is cost-efficient and has proven very useful in the management of trauma victims.