Rapidly rising medical care costs have become an important political issue in industrialized countries during the past decade. Attempts to control the growth in expenditures have focused on the contribution of medical technology to costs. All industrialized countries have begun to experiment with the kinds of mechanisms necessary to effect changes in development, diffusion, and use of medical technologies. This paper describes government policies toward: 1) research and development, 2) evaluation, 3) safety and efficacy regulation, and 4) investment in and use of medical technologies. To clarify how these policies work in practice, policies toward CT scanners, renal dialysis, and coronary bypass surgery are examined. Rapid changes in policies and laws in different countries are attempts to find effective policy mechanisms, but also reflect the difficulties of choosing a realistic policy objective. Until recently, most countries have focused on promoting the development and adoption of new technologies, or increasing the efficiency of their production and use. A few governments have begun to question and test the benefits of medical technologies as an aid to decision making. Finally, with the growing realization that every kind of care that is beneficial cannot be provided, some countries have begun to consider limiting the diffusion of technologies to a level that strikes a balance between the benefits to be gained and the costs of achieving them.