BACKGROUND: In the United States of America, approximately 700,000 patients undergo laparoscopic cholecystectomy (LC) each year and at least 10 percent of these patients will have common bile duct stones (CBDS). The purpose of this study was to evaluate patients with choledocholithiasis and compare the economic and clinical results obtained by LC with endoscopic sphincterotomy (ES) with those of LC with laparoscopic transcystic common bile duct exploration (LTCBDE). STUDY DESIGN: From June 1991 to September 1994 patients undergoing LC plus LTCBDE and those undergoing LC plus ES at a single institution were compared where cost data were available. Of the 76 patients with choledocholithiasis, 59 patients underwent LC plus LTCBDE (group 1) and 17 patients underwent LC plus ES (group 2). A subset of group 1 patients undergoing urgent LC plus LTCBDE (group 3) for cholecystitis, cholangitis, or pancreatitis plus laparoscopy were examined separately. RESULTS: Laparoscopic cholecystectomy plus LTCBDE, whether including all-comers (group I) or just urgent cases (group 3), was associated with a significantly decreased length of hospital stay (6.1 and 6.9 days, respectively, compared with group 2, 12.4 days) (p<0.001), The morbidity of patients in group 1 was also markedly lower than for patients in group 2; 12 percent compared with 41 percent, respectively. Patients in group 1 had a significantly decreased cost of hospitalization ($13,151), when compared with patients in group 2 ($18,712) (p=0.05). This difference is even more pronounced when professional fee reimbursement is considered. The cost of treatment for patients in group 1 was $14,732 compared with $21,125 for patients in group 2 (p<0.05). The total hospital cost for patients in group 3 was only $13,564 compared with $18,712 for patients in group 2. When professional reimbursement was considered, the cost was $15,150 for patients in group 3 compared with $21,125 for patients in group 2. CONCLUSIONS: Patients undergoing LC plus LTCBDE for CBDS, whether urgently or electively, have markedly decreased morbidity rates, length of hospital stay, and costs when compared with patients undergoing LC plus ES.