This study investigates the relation between audit quality, auditor industry market share, and audit fees. Prior literature has asserted that audit providers with high market shares can be designated as industry specialists and that the fee premiums that sometimes attach to these auditors is evidence of a quality differentiated audit product. Using data from the U.S. audit market for the fiscal year 2003 we extend this literature by investigating the relationships among audit fee premiums, auditor market shares, and two dimensions of audit quality: external reporting and economies of scope in providing joint audit and non-audit services. We find little evidence to support the conjecture that high market share auditors provide increased audit quality. Further, we find that most auditors with high market shares do not seem to charge a fee premium. To the contrary, we report that the high market share fee premiums found in pooled (across industry) tests are primarily attributable to a small set of industries in which the high market share (specialist) auditor has a dominant position. This leads us to conclude that the available evidence is more supportive of the hypothesis that high-market share firms are extracting rents than the hypothesis that these auditors are providing a quality differentiated product.