A hospitalist system was developed at Park Nicollet Clinic in 1993, was implemented in 1994, and remains in existence today. It was established without knowledge of any other similar program in the United States. Internists and family practitioners were given the choice to continue to care for hospitalized patients or to become totally office based. The new system has met with good patient acceptance along with increased physician satisfaction and retention. This paper describes some key aspects of the institution of the system in a multispecialty group that includes both family practitioners and internists.