The Andhra Pradesh Vaidya Vidhana Parishad (APVVP) was commissioned in 1987 to management of all secondary level hospitals in the State of AP. This is the first autonomous body of public hospitals, set up by any state in India . This experiment caught attention of the Government of India, various states in India , the World Bank and the Harvard University ’s Data for Decision Making office (DDM). This study was jointly conducted by the DDM and the IHS to document the case of hospital autonomy through the APVVP. The study found that full benefits of autonomy can be better realized if the right person is selected for the job. Full benefits of good leadership can be better realized if the environment is enabling. Because of its autonomous nature, APVVP has been very successful in mobilizing institutional finance and resources from public. Autonomy has also been useful in ensuring gains on other fronts, like maintenance of equipment and buildings, and to some extent, quality of care. However, autonomy has meant little or nothing to the staff employed in the organization, and has not been accompanied by any incentives for those working in the organization. While APVVP, an organization managing over 160 hospitals with a total of over 9,000 beds, is an autonomous organization, the individual hospitals, that are discrete units by themselves, are not autonomous. While the legal framework for autonomy has been in existence since the earliest days of the organization, de facto autonomy has tended to be influenced by a host of factors including the relative situation and strength of the Commissioner vis-a-vis the Health Secretary. In effect, the organization has been as autonomous as the Commissioner has been able to make it or as much as the Health Secretary has permitted it to be, or some combination of both. The study took place between August, 1995 and August, 1996 and was funded by the USAID through the HSPH Data for Decision Making (DDM) office^[1]. Results of the study have been published by the HSPH-DDM^[2] and the IHS^[3].