The objective of this study was to analyze the cost effectiveness of PACS with the coverage of the medical insurance. Direct and indirect costs and benefits of PACS as well as indirect effects were included in the analyses. Cost and benefit data were obtained from two user and two non-user hospitals located in Seoul and Kyunggi Province. Radiology technologists and clerks were surveyed to obtain data for indirect effects of PACS. The present value of the direct net benefit of PACS during the study period of five years estimated for a 740-bed hospital was about 744 mill ion Won and the benefit to cost ratio for the direct effect was 1.07. and the total net benefit was about 4.110 million Won and the benefit to cost ratio for the total effect was 1.36. Clerks at the user hospitals had significantly higher job satisfaction than their counterpart at the non-user hospitals for speedy lending (p<0.05) and good relationship with radiologists (p<0.0l). These study results indicated that PACS was cost beneficial with the coverage of the medical insurance and was effective in limited measures of quality of care and job satisfaction of employees at radiology departments as well. The study results also guaranteed further research that extend the scope to the physicians in clinical and radiology departments and nurses.