In the present work, treating the arteries as a tapered, thin walled, long and circularly conical prestressed elastic tube and the blood as a Newtonian fluid, we have studied the amplitude modulation of nonlinear waves in such a fluid-filled elastic tube, by use of the reductive perturbation method. The governing evolution equation is obtained as the dissipative nonlinear Schrodinger equation with variable coefficients. It is shown that this type of equations admit solitary wave solutions with variable wave amplitude and speed. It is observed that, the wave speed increases with distance for tubes of descending radius while it decreases for tubes of ascending radius. The dissipative effects cause a decay in wave amplitude and wave speed. (C) 2002 Elsevier Science Ltd. All rights reserved.