At The Johns Hopkins Hospital from 1979 through 1987, 42 patients had 45 procedures for benign postoperative biliary strictures. Three patients were managed with both surgery and balloon dilatation. Twenty-five patients underwent surgical repair with Roux-Y choledocho- or hepaticojejunostomy with postoperative transhepatic stenting for a mean of 13.8 +/- 1.3 months. Twenty patients had balloon dilatation a mean of 3.9 times and were stented transhepatically for a mean of 13.3 +/- 2.0 months. The two groups were similar with respect to multiple parameters that might have influenced outcome. Mean length of follow-up was 57 +/- 7 and 59 +/- 6 months for surgery and balloon dilatation, respectively. No patients died after any of the procedures. The same definition of a successful outcome was applied to both groups and was achieved in 88% of the surgical and in only 55% of the balloon dilatation patients (p less than 0.02). Significant hemobilia occurred more often with balloon dilatation (20% vs. 4%, p less than 0.02). The total hospital stay and cost of balloon dilatation was not significantly different from surgery. We conclude that surgical repair of benign postoperative strictures results in fewer problems that require further therapy. Nevertheless balloon dilatation is an alternative for patients who are at high risk or who are unwilling to undergo another operation.