Departments of medicine have grown from small, professorial, hospital-based units to large, multi-institutional organizations. Their growth is analyzed from the perspectives of teaching, graduate training, research, patient care, and organization. Research-oriented departments of medicine are heavily dependent on federal funds, and this dependence has profound implications for all aspects of a department's function. The job of the chairman has become progressively more difficult, and a rapid turnover of chairmen has resulted. The major reasons for a chairman's distress are the excessive expectations placed on him. Some possible remedies to make the chairman's lot easier include better managerial help, improved fiscal support, and alternative forms of organization. Departments of medicine must improve their planning processes if they are to survive in the 1980's. (N Engl J Med. 1980; 303:489–96.)