The performance of area health education center (AHEC)-stimulated programs and decentralized education for medicine is not well understood. The Statewide Education Activities for Rural Colorado's Health (SEARCH)/AHEC project at the University of Colorado School of Medicine was examined to determine if the program had an effect on the practice location of its graduates. Practice location and specialty of graduates of the University of Colorado School of Medicine (UCSOM) classes 1980-1985 were compared for students who had participated in decentralized SEARCH/AHEC experiences versus students who had not. The majority of the graduates were practicing out of state in 1990. Non-Colorado doctors were more often practicing in rural (non-metropolitan statistical area [MSA]) counties and in towns of fewer than 2,500, 5,000 and 10,000 residents, respectively. In addition, of the 251 active patient care physicians practicing in Colorado communities of fewer than 10,000 in non-MSA counties in 1986, those who precepted UCSOM students on SEARCH rotations were more likely to have remained in their same practice location in 1992 (77.8% versus 62.1% for those who had not precepted students). This analysis of both student and preceptor practice patterns documents the value of decentralized medical education in addressing the geographic and specialty maldistribution of physicians. These results have important policy implications for funding medical education programs.