OBJECTIVE: To understand the role of race, ethnicity, and affluence in elderly patients' use of teaching hospitals when they have that option. METHODS: Using a novel data set of 787,587 Medicare patients newly diagnosed with serious illness in 1993, we look at how sociodemographic factors influence whether patients use a teaching hospital for their initial hospitalization for their disease. We use hierarchical linear models to take into account differences in the availability of teaching hospitals to different groups. These models look within groups of people who live in the same county and ask what demographic factors make an individual within that county more or less likely to use a teaching hospital. RESULTS: We find that blacks are much more likely than whites to use teaching hospitals (odds ratio [OR], 1.75; 95% confidence interval [95% CI], 1.73 to 1.77). However, Hispanics and Asian-Americans are less likely to use teaching hospitals than are whites (Hispanic OR, 0.92; 95% CI, 0.88 to 0.97; Asian-American OR, 0.89; 95% CI, 0.82 to 0.97). Medicaid patients are less likely to use teaching hospitals (given their opportunities) than are non-Medicaid recipients (OR, 0.91; 95% CI, 0.90 to 0.92). And we find a curvilinear relationship with affluence, with those in the poorest and those in the wealthiest neighborhoods most likely to use a teaching hospital. CONCLUSION: The use of teaching hospitals is more complex that heretofore appreciated. Understanding why some groups do not go to teaching hospitals could be important for the health of those groups and of teaching hospitals.