Between 1971 and 1976, ninety-three patients with a clinical diagnosis of pseudocyst confirmed by ultrasonography were identified from a group of 923 patients admitted for pancreatic disease. Uncertainties in diagnosis and/or rapid progression of underlying pancreatitis led to urgent laparotomy and drainage in eleven of the ninety-three patients. Another twenty-eight patients underwent elective drainage of the pseudocyst. The remaining fifty-four constituted the study group and were followed with serial clinical and sonographic examinations until either spontaneous resolution occurred, complications developed, or the patients did not return. Complications arising during the period of observation in the untreated patients (rupture, abscess, jaundice, and hemorrhage) occurred more than twice as commonly as spontaneous resolution (41 per cent versus 20 per cent), and led directly to death in seven cases (14 per cent). No deaths occurred in the group of patients undergoing elective surgical drainage (p less than 0.05). The interval between presumed formation of the pseudocyst and the development of a complication averaged 13.5 +/- 6 weeks. Prolonged observation of pancreatic pseudocysts in the expectation of spontaneous resolution exposed the patient to an unwarranted risk, which, after seven weeks, greatly exceeded the mortality of elective surgery.