Like most countries, Japan is facing constraints on expansion of health system financial resources. There are almost 250000 Japanese patients with end-stage renal disease and almost all are managed by chronic dialysis. Hospital hemodialysis is the modality used by 96% of these patients. The Japanese health-care system has tended to support resource-intensive treatments because the fee-for-service remuneration system has rewarded their utilization. This has benefited hemodialysis at the expense of peritoneal dialysis. However, this may now be changing. Case management and global budget-related approaches are being more widely introduced, as are incentives to reward more efficient treatment options. The relative costs of dialysis modalities are difficult to appreciate, as center-based services, such as hospital hemodialysis, are dependent upon fixed resources, while home-based options, such as peritoneal dialysis, are dependent upon variable resources. The aim of this review is to reconcile various sources of information relevant to end-stage renal disease funding in Japan. The review will suggest that modifying the approach to modality selection could lead to more efficient allocation of future dialysis-related resources and so reduce the strain on Japan's health-care budget.