We studied two methods to reduce the ordering of laboratory and radiologic tests by medical residents in their first postgraduate year. Dividing the residents into three groups, we compared the effect of concurrent chart review and discussion in one group with the effect of a moderate financial incentive for limited ordering of tests in a second group. The third group of residents served as a concurrent control, and data on the testing patterns of residents at the same hospital during the year before the study provided a retrospective control.