Physicians trained primarily to recognize and treat disease are being asked more frequently to quantify impairment of health. Criteria for defining impairment due to chronic obstructive pulmonary diseases are widely accepted, but it has been difficult to establish guidelines for interstitial diseases. To develop and validate criteria, we selected 2,420 patients with airflow obstruction; 821 had interstitial disease, and 938 were employees of asbestos industries. We found that clinical and roentgenographic criteria were inappropriate for defining impairment. The forced vital capacity and single-breath diffusing capacity, each expressed as a percentage of the predicted value, were selected for analysis. Sensitivity studies using response to standard exercise as an independent criterion suggested that the limits reflecting severe impairment were a forced vital capacity 50% of predicted and a single-breath diffusing capacity 40% of predicted. Applying these criteria, 35.6% of patients with interstitial pneumonia, 12.1% with sarcoidosis, and 13.6% with pneumoconioses, but only 1.1% of the workers exposed to asbestos were severely impaired. In more than one half of patients the single-breath diffusing capacity was the only test that indicated severe impairment.