Telemedicine is the use of technology to provide healthcare over a distance. Telehomecare, a form of telemedicine based in the patient's home, is a communication and clinical information system that enables the interaction of voice, video, and health-related data using ordinary telephone lines. Most home care agencies are adopting telehomecare to assist with the care of the growing population of chronically ill adults. This article presents a summary and critique of the published empirical evidence about the effects of telehomecare on older adult patients with chronic illness. The knowledge gained will be applied in a discussion regarding telehomecare optimization and areas for future research. The referenced literature in PubMed, MEDLINE, CDSR, ACP Journal Club, DARE, CCTR, and CINAHL databases was searched for the years 1995-2005 using the keywords "telehomecare" and "telemedicine," and limited to primary research and studies in English. Approximately 40 articles were reviewed. Articles were selected if telehealth technology with peripheral medical devices was used to deliver home care for adult patients with chronic illness. Studies where the intervention consisted of only telephone calls or did not involve video or in-person nurse contact in the home were excluded. Nineteen studies described the effects of telehomecare on adult patients, chronic illness outcomes, providers, and costs of care. Patients and providers were accepting of the technology and it appears to have positive effects on chronic illness outcomes such as self-management, rehospitalizations, and length of stay. Overall, due to savings from healthcare utilization and travel, telehomecare appears to reduce healthcare costs. Generally, studies have small sample sizes with diverse types and doses of telehomecare intervention for a select few chronic illnesses; most commonly heart failure. Very few published studies have explored the cost or quality implications since the change in home care reimbursement to prospective payment. Further research is needed to clarify how telehomecare can be used to maximize its benefits among diverse adult chronic illness populations.