Guidelines for the use of nebulizers outside of the hospital were developed at the request of the Health Care Financing Administration (HCFA) to assist in the preparation of Medicare criteria for reimbursement. The National Association for Medical Direction of Respiratory Care (NAMDRC) convened a consensus conference in Leesburg, Va, with physician representatives from the major medical organizations involved in adult and pediatric respiratory care. Members of the health-care industry also were invited to participate. After review of the pertinent references, members of the faculty were preassigned topics for presentations during the first day of the meeting. Three workshops were organized to address segments of the consensus statement and to develop written reports. Each report was reviewed by the entire group and then finalized. The Consensus Conference recommends that a metered-dose inhaler (MDI) with reservoir chamber is the preferred mode of aerosol therapy for patients outside of the hospital. The circumstances under which a small-volume nebulizer (SVN) may be appropriate are described. The medications that may be administered by SVN are identified with recommendations as to the usual doses to be prescribed. A cost analysis of the various modes of aerosol therapy is presented. These guidelines should be of value to physicians who are prescribing aerosol therapy in the home and also to policy makers who are developing guidelines for reimbursement.