Abstract Between 1969 and 1987, 68 patients with pancreatic pseudocysts were treated. The median cyst size was 10 cm (range 2–25 cm). Nine patients were managed conservatively with resolution of the pseudocyst occurring in eight patients. These patients had significantly smaller (median 4 cm) cysts compared with those in both percutaneously and surgically treated patients (P < 0·01). In 22 patients the pseudocysts (median 9 cm) were punctured percutaneously under ultrasound guidance and the cyst fluid was aspirated or drained through a catheter. Complete resolution occurred in 13 patients after 1–4 (mean 2·8) punctures per patient, regression occurred in six patients after 1–4 (mean 2·0) puncture procedures per patient and three were unchanged. No complications were noted, except that two patients treated percutaneously required additional surgery. Thirty-seven patients were managed surgically (median cyst size 11 cm) with external drainage (12 patients), cystgast-rostomy (17 patients), cystduodenostomy (three patients) cystjejunostomy (three patients) and pancreatic resection (two patients). Resolution of the cyst was noted in 29 patients, regression in five and three were unchanged. Five patients required additional surgery. Twelve complications were seen in ten patients (27 per cent), most frequently after external drainage. One patient died after surgical treatment. Mean hospital stay was 13 days among patients treated conservatively and 30 days in both percutaneously and surgically treated patients. Aspiration or catheter drainage of pseudocyst fluid guided by ultrasonography seems a safe and effective treatment of pancreatic pseudocysts and should be considered as initial therapy. If surgery is required cystgastrostomy is preferred.