This paper describes the design and implementation of a low- cost PACS conforming to the DICOM 3.0 standard. The goal was to provide an efficient image archival and management solution on a heterogeneous hospital network as a basis for filmless radiology. The system follows a distributed, client/server model and was implemented at a fraction of the cost of a commercial PACS. It provides reliable archiving on recordable CD and allows access to digital images throughout the hospital and on the Internet. Dedicated servers have been designed for short-term storage, CD-based archival, data retrieval and remote data access or teleradiology. The short-term storage devices provide DICOM storage and query/retrieve services to scanners and workstations and approximately twelve weeks of 'on-line' image data. The CD-based archival and data retrieval processes are fully automated with the exception of CD loading and unloading. The system employs lossless compression on both short- and long-term storage devices. All servers communicate via the DICOM protocol in conjunction with both local and 'master' SQL-patient databases. Records are transferred from the local to the master database independently, ensuring that storage devices will still function if the master database server cannot be reached. The system features rules-based work-flow management and WWW servers to provide multi-platform remote data access. The WWW server system is distributed on the storage, retrieval and teleradiology servers allowing viewing of locally stored image data directly in a WWW browser without the need for data transfer to a central WWW server. An independent system monitors disk usage, processes, network and CPU load on each server and reports errors to the image management team via email. The PACS was implemented using a combination of off-the-shelf hardware, freely available software and applications developed in-house. The system has enabled filmless operation in CT, MR and ultrasound within the radiology department and throughout the hospital. The use of WWW technology has enabled the development of an intuitive we- based teleradiology and image management solution that provides complete access to image data.