BACKGROUND Medical Technology (MT) provides innovative instrumentation and methods designed for the purpose of improving prevention, diagnostics, therapy and rehabilitation. MT rooting in science, engineering and the biosciences is characterized by its inter- and transdisciplinarity. METHODS The current status of MT is described emphasizing the five aspects: (1) review of milestones, (2) the impact of MT on the health care system, (3) the economic significance of MT, (4) the financial resources dedicated to research and development in MT, and (5) the challenges for education and training in MT. The material used is a government issued survey on the situation of MT in Germany, data of health care authorities and congress reports from World Conference on Medical Physics and Biomedical Engineering 2005. RESULTS The following fields of MT have emerged in recent years and will dominate future development: BioMEMOS, imaging technology, minimally invasive surgery, computer assisted diagnosis, therapy and treatment monitoring, e-health/telemedicine/ networking, and medical engineering for regenerative medicine. Development of MT is driven by the following facts, (1) early and individualized diagnosis enables better treatment, (2) MT enhances cost effectiveness in health care, (3) MT is an economic factor based on fast innovation cycles, a roughly 50% export share and a 6% growth rate in turnover during the last 10 years. A downward tendency of the domestic MT market is a challenge for appropriate measures in improving both the economic and the academic infrastructure, in particular by targeted actions to support research and education. CONCLUSIONS The impact of MT on prevention, diagnostics, therapy and rehabilitation is significant and still increasing. Due to a wide spreading in all medical areas, the high innovation rate, and the potential to improve health care, MT is considered one of the key technologies even in the future.