This paper critically reviews three decades of research on geographic variations. in health services utilization in the United States, thereby drawing policy and research implications for Korea. The recent renewed interest in variations research in the United States, precipitated by studies on regional variations in Medicare expenditures, stems mainly from the policy implication that a substantial amount of Medicare expenditures could be saved without compromising quality and access. From the research perspective, this policy implication was made tenable by integrating micro- and macro-level analysis of variations in health services utilization. Still, theoretical limitations inherent in the research pose great challenges to developing effective strategies at the health system level. Variations research in the United States can serve as a case study as to how health services research has responded to efficiency and quality issues in an ever expanding health system Considering the current health policy and research environment in Korea, the following implications can be drawn. Variations research will help formulate a national policy agenda for health care quality and also advance the framework of approaches to health policy issues. For such purposes, both relevant descriptive and hypothesis-testing studies are needed. Further advancement in variations research will require interdisciplinary explorations and methodological sophistication. To the extent that Korean health policies will strive to achieve complex goals, variations research will increasingly prove to be useful.