The first national study of Caesarean section rates was made possible by combining 1986 data from hospital morbidity collections and medicare claims. Rates per 100 births, based on the area of usual residence of the mother, were calculated for statistical local areas, which were aggregated to statistical subdivisions, statistical divisions and States. The rate for mainland Australia was 16.9% (Tasmania could not be included). Variations in rates were of the order of one and a half- to two-fold. The highest rates were found in Canberra and central Brisbane (26.3% and 25.4% respectively). The rates for Northern Territory, South Australia, and Queensland were higher than those for other States. There were few consistent patterns in the variations. Generally rates were highest in the State capital cities and for insured women. This suggests an association with the supply of obstetricians and with demand factors such as the expectations of obstetricians and consumers.