The effect of implementation of the referral system in health care was studied in four administrative regions of the Kingdom of Saudi Arabia. The study covered the six-month period before and after the implementation of the system. These regions represented the northern, southern, eastern, and central parts of the country. The western region was not included because it was late to implement the system. The study concentrated on the changes that took place in the workload and types of patient problems in hospitals and primary health care centers. The study covered Majma, Dammam Central, Hail General, and Abu Arish hospitals and the 107 health centers attached to them. The size of the hospitals at the time of implementing the referral system was considered during the design of the study. The referral rate was found to range from 3.2 to 4.2%. The number of patients attending the hospital outpatient departments decreased from 43.7% to 65%, but the number of patients attending the accidents/emergency departments increased from 1 to 129.7%. The consultations at the health centers increased from 2.5 to 35.2%. More severe conditions were managed at hospital outpatient departments, while less severe cases were screened and managed at the health care center level. The average duration of stay in all the hospitals remained approximately the same, except for Abu Arish Hospital where it declined by 50%. The bed occupancy rates showed a slight decrease in Dammam and Majma and increase in Hail and Abu Arish. The study suggested certain steps that are necessary to sustain improvement in the referral system. Arabia. 1991; 11(6): 663-668 In 1404H (1984, the Ministry of Health in the Kingdom of Saudi Arabia named primary health care as one of the most important strategies of the fourth five-year plan (1985)(1986)(1987)(1988)(1989)(1990) [1]. This approach has been described as the most outstanding contribution to the overall improvement in the health care delivery services in the last fifteen years. The success story of the adoption of the primary health care approach in the Kingdom within a relatively short time can be attributed to the practical and socially acceptable nature of the scheme [2,3]. However, the approach also requires complete coordination between the three levels of primary, secondary, and tertiary care through a structured referral system, aimed at offering the best possible and most cost-effective services to all the citizens. Studies elsewhere showed that the number of referrals from primary health care centers to hospitals range from 1 to 28%