Under appropriate conditions, the absorption of finite amplitude ultrasound is determined largely by source amplitude, field geometry, and the nonlinear properties of the medium and is only weakly dependent upon the small signal absorption coefficient of the material. The characteristics of this absorption are completely foreign to the ideas that we have come to associate with small signal losses. Under certain conditions, finite amplitude absorption is somewhat greater in focused than in plane-wave fields. Under medically relevant conditions, heating of tissues may be enhanced by a factor of 3 or more by nonlinear phenomena. Some commercially available diagnostic instruments may be capable of producing focal pressure amplitudes high enough to result in nonlinear contributions to local heating. The resulting total temperature increments could exceed the 1°C, the value universally regarded as safe. Finite amplitude processes affect the thresholds for tissue damage. The characteristics of the threshold curves differ qualitatively depending upon whether they are expressed in terms of local or source intensities. [This work was supported in part by U.S.P.H.S. Grant No. CA39241.]