Observational analogs of randomized clinical trials (RCTs) are well accepted in the study of disease risk factors, diagnosis, and prognosis. There is controversy about observational studies when the focus is on the intended benefit due to lack of blinding and poor control for unmeasured confounding. Well-designed randomized clinical trials are costly both in time and money. Therefore, existing databases are used increasingly and are often the only feasible source with which to examine delayed health effects. We reviewed the reasons for possible discrepancies between RCTs and observational studies. There can be different patient populations, differences in therapeutic regimen, control of confounding, follow-up, measuring outcome, and differences arising from the intention-to-treat analysis. Observational studies cannot replace trials, nor do trials make observational studies unnecessary. Both designs are susceptible to particular bias, so neither provides perfect information. (HEPATOLOGY 2006;44:1075-1082.).