As described in the introduction, the data presented in this report can be viewed in both a historical and an environmental context. From a historical perspective, there has been change in many areas of medical education. The number of applicants to medical schools has risen sharply in the past few years, a result seemingly inconsistent with the dissatisfaction with medicine expressed by many physicians and with the uncertainties about the eventual outcomes of health system reform. The number of minority applicants and enrollees is slowly rising, but at rates below the goals identified by such initiatives as the Association of American Medical Colleges' "Project 3000 by 2000." Even with the expansion of the applicant pool, however, most medical schools do not anticipate enrollment increases. Medical school tuition also continues to increase significantly, in both public and private schools. The number of faculty members in the clinical disciplines also has continued to rise, although the rate of increase has become less marked. The decrease in the number of basic science faculty members that occurred this year will need to be monitored to ensure that appropriate faculty resources are available for teaching, especially with the initiatives to introduce more active learning formats during the basic science years. The medical curriculum continues to evolve at differing rates across schools. Many "innovations" have become part of the curricular repertoire; for example, medical schools have incorporated educational formats, such as problem-based learning or computer-assisted instruction, which emphasize active student learning, although in a number of cases they are limited to a small portion of the curriculum. In addition, the availability of clinical experiences during the first 2 years of the curriculum, especially those located in ambulatory settings, gives students an early glimpse of the world of actual medical practice. The use of standardized patients provides system and structure in the teaching and evaluation of clinical skills. Therefore, a look at medical education as a whole in the historical context reveals many positive changes (for example, an increase in student diversity over time, the introduction of alternative instructional formats, and attempts to evaluate student clinical competence more reliably). Within the context of environmental expectations, however, many challenges still remain. Medical schools are experiencing pressure to solve perceived problems with the specialty distribution of their graduates and with the specialty distribution of the general physician population, even though factors outside the control of the medical school, such as reimbursement and the practice environment, also influence specialty choice.(ABSTRACT TRUNCATED AT 400 WORDS)