Objective: To examine the effect of the number of physicians on the utilization of ambulatory services for insured persons. Methods: The insured population was the target population in this study, and a two-part analysis was used in this study. To test the impact of physician supply on ambulatory care utilization, we categorized the medical care sub-regions for three levels according to the density of medical doctors: low, median, and high. Information about individuals' medical utilization was collected from the 1994 Taiwan Health Interview Survey (THIS). The physician-to-population ratios for each region were obtained from the 1994 Medical Care Manpower Survey in Taiwan compiled by the Department of Health and from the Taiwan-Fukien Demographic Fact Book published by the Ministry of the Interior, Republic of China. Results: After controlling for extraneous factors, the effect of the number of community physicians on the use of ambulatory services by the insured was not found to be statistically signific ant for the differences among the high, median, and low groups. Conclusion: Therefore, there is insufficient evidence to support the view that the presence of fewer community physicians have discouraged the utilization of ambulatory services by the insured. However, whether this indicates that people with less medical resources where they live have paid higher time and transportation costs to obtain the needed care deserves further investigation for policy formulation.