Service recovery is defined as that part of quality management designed to alter the negative perceptions of dissatisfied consumers and to ultimately maintain a business relationship with these consumers. This article explores the theoretical and operational implications of service recovery in health services organizations. A framework that defines the range of possible service recovery actions is presented. Next, the benefits of and obstacles to service recovery in health services firms are discussed, and solutions for overcoming these obstacles are presented. Finally, the critical components of an effective service recovery program are described, and an agenda for empirical research on the efficacy of service recovery activities is proposed.