OBJECTIVE To prove that tracheostomy performed at the bedside in the intensive care unit is a safe, cost-effective procedure. METHODS Retrospective review of all adult patients undergoing elective bedside tracheostomy in the intensive care unit between January 1983 and December 1988. Two hundred four patients were identified. METHODS A private 1200-bed tertiary care center with a 120-bed critical care facility. METHODS Major and minor perioperative complications, cost savings, and comparison of risk between bedside tracheostomy and that performed in the operating room. RESULTS There were six major complications (2.9%): one death due to tube obstruction, two bleeding episodes requiring reoperation, one tube entrapment requiring operative removal, one nonfatal respiratory arrest, and one bilateral pneumothorax; and seven minor complications (3.4%): five episodes of minor bleeding, one tube dislodgement in a tracheostomy with a well-developed tract, and one episode of mucus plugging. One late complication (tracheal stenosis) was identified. CONCLUSIONS Bedside tracheostomy in the intensive care unit can be performed with morbidity and mortality rates comparable to operative tracheostomy. In addition, it provides a significant cost savings for the patient.