This article provides a comprehensive analysis of the social, cultural and economic factors which have led to the present pattern of technology utilization in Japan. It is divided into five sections. The first provides the historical framework; the second, an overview of the health care delivery context and its economic incentive structure; the third, an analysis of the various contenders involved in the process of resource allocation; the fourth, a description of the technology areas which have been emphasized in Japan; and the fifth, an examination of future issues.