The Hinsdale Sanitarium and Hospital Pathology Department installed a Pathlab (The MEDLAB Company) Laboratory Information System (LIS) in October of 1977. Acquisition of the system was based upon a study. "Justification for a Laboratory Information System", prepared in October 1976. This report presents findings on the evaluation of this system after 2 1/2 years of operation in relationship to the initial objectives developed in the justification study. The impact of the system on personnel (intra- and extradepartmental) as it relates to daily activities was also considered. The effectiveness of the system in contributing to the goals of improving the operation and management of the laboratory by enhancing communication of our services toward quality patient care was carefully studied through users' opinion surveys evaluation. The evaluation plan is developed by first describing the initial basic system, initial costs, and the impact of continuing cost to the institution (service, software modification, etc.). The department's problem areas were identified along with deviations from the justification expectations of the LIS. The conditions existing currently and attitudes of user personnel toward the system were surveyed at all levels of the institution. The survey revealed that 20 (87%) of 23 specific goals or expectations stated in the original justification report were satisfied. There was a partial achievement of 2 objectives (8.7%), and 1 (4.3%) was not achieved. The survey also revealed a net annual cost reduction of 128,756 as a result of the LIS. Payback period to recover the entire systems's cost is estimated at 4.0 years. This includes all purchased hardware and software to date.