The objective of this study was to survey the use of observation units (OUs) in the United States. A written survey was mailed to every third hospital (sequential by zip code) in the United States. There was a 32.9% response to the survey (522 of 1588 hospitals). A total of 18.8% of hospitals had an OU with another 11.6% planning to open an OU. Those hospitals that had OUs had a higher overall ED census, higher rate of diversion of ambulances, and were more likely to be in metropolitan areas (P <.05), but there was no relationship to payor mix or to ED hospital admission rate. The OUs were characterized by a mean 4.8 years in existence, 57.3% ED administratively responsible, 59.4% ED clinically responsible, a mean of 1330 patients per year, an average length of stay of 15.3 hours, a 4.2 nurse-to-patient ratio, and 22.3% hospital admission rate.