Although teaching hospitals are increasingly using nurse practitioners (NPs) to provide inpatient care, few studies have compared care delivered by NPs and housestaff or the ability of NPs to admit and manage unselected general medical patients. In a Midwest academic teaching hospital 381 patients were randomized to general medical wards staffed either by NPs and a medical director or medical housestaff. Data were obtained from medical records, interviews and hospital databases. Outcomes were compared on both an intention to treat (i.e. wards to which patients were randomized) and actual treatment (i.e. wards to which patients were admitted) basis. At admission, patients assigned randomly to NP-based care (n = 193) and housestaff care (n = 188) were similar with respect to demographics, comorbidity, severity of illness and functional parameters. Outcomes at discharge and at 6 weeks after discharge were similar (P > 0.10) in the two groups, including: length of stay; charges; costs; consultations; complications; transfers to intensive care; 30-day mortality; patient assessments of care; and changes in activities of daily living, SF-36 scores and symptom severity. However, after randomization, 90 of 193 patients (47%) assigned to the NP ward were actually admitted to housestaff wards, largely because of attending physicians and NP requests. None the less, outcomes of patients admitted to NP and housestaff wards were similar (P > 0.1). NP-based care can be implemented successfully in teaching hospitals and, compared to housestaff care, may be associated with similar costs and clinical and functional outcomes. However, there may be important obstacles to increasing the number of patients cared for by NPs, including physician concerns about NPs' capabilities and NPs' limited flexibility in managing varying numbers of patients and accepting off-hours admissions.