A randomized controlled trial was conducted to assess efficacy and cost of sustained home nursing care for patients with chronic lung disease. Three hundred one patients were randomly assigned to a respiratory home care group (RHC) that received care from respiratory home care nurses, a standard home care group (SHC) that received care from regular home care nurses, or an office care group (OC) that received whatever care they needed except for home care. Patients were followed for 1 year. At the end of the study year, there was no difference in survival, pulmonary function, or everyday functioning among the three groups. Average annual cost of care for all study patients was $7,647 (1981-82 dollars). The average annual health care costs for patients in the RHC group was $9,768; for those in the SHC group, $8,058; and for those in the OC group, $5,051 (F = 6.45, df = 2/298, P = 0.02). These results suggest that the current policy of limited coverage of home nursing services by Medicare and other third-party payers may be appropriate.