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The supply of physicians has increased rapidly during the past decade. To examine the impact of this expanding supply on the geographic distribution of physicians in rural areas, we examined the location patterns of 1974-78 medical school graduates practicing in 1983 in rural areas. Of 2,112 rural counties, 58 percent gained at least one 1974-78 graduate; 31 percent of the least populous rural counties gained physicians; and 92 percent of most populous counties gained physicians. When Health Manpower Shortage Areas were examined separately, it was found that only 45 percent of the HMSAs that consisted of an entire county gained a young physician compared with 61 percent of non-HMSA counties. Characteristics of counties that gained a young physician were compared with characteristics of counties that did not attract a young physician. Results of the multivariate analysis indicated that the probability that a county would attract a young physician is positively related to population, the supply of physicians, the proportion of white collar employment, and the presence of a college. Higher levels of farm population are associated with a lower probability that a county would attract a young physician. These findings suggest that diffusion of young physicians into rural areas is occurring as the supply of physicians increases. However, young physicians are attracted to communities with particular characteristics. Those counties with fewer attractive characteristics may continue to have difficulty gaining physicians to serve their communities.