OBJECTIVE: To describe doctors' prognostic accuracy in terminally ill patients and to evaluate the determinants of that accuracy. DESIGN: Prospective cohort study. SETTING: Five outpatient hospice programmes in Chicago. PARTICIPANTS: 343 doctors provided survival estimates for 468 terminally ill patients at the time of hospice referral. MAIN OUTCOME MEASURES: Patients' estimated and actual survival. RESULTS: Median survival was 24 days. Only 20% (92/468) of predictions were accurate (within 33% of actual survival); 63% (295/468) were overoptimistic and 17% (81/468) were overpessimistic. Overall, doctors overestimated survival by a factor of 5.3. Few patient or doctor characteristics were associated with prognostic accuracy. Male patients were 58% less likely to have overpessimistic predictions. Non-oncology medical specialists were 326% more likely than general internists to make overpessimistic predictions. Doctors in the upper quartile of practice experience were the most accurate. As duration of doctor-patient relationship increased and time since last contact decreased, prognostic accuracy decreased. CONCLUSION: Doctors are inaccurate in their prognoses for terminally ill patients and the error is systematically optimistic. The inaccuracy is, in general, not restricted to certain kinds of doctors or patients. These phenomena may be adversely affecting the quality of care given to patients near the end of life.