Much of the tension and conflict that result from the competing demands of work and learning during residency training–the service versus education conflict–can be addressed by mutual adherence to fundamental guidelines of fairness and personal responsibility by residents and their employers, mentors, and teachers. Residents should be recognized by their employers as professionals and by their teachers as colleagues. Because residency is postgraduate professional education for medical school graduates, the content of resident education must be primarily determined by the educational needs of maturing physicians. The greatest value of residents' services for their employing Institutions remains in the Inpatient setting where they work as inexpensive professional labor, working long and unattractive patient care shifts providing acute care. In the ambulatory setting, they are less efficient, work ordinary hours, and require realtime on-site supervision. Nevertheless, it is clear that the opportunities for medical education are rapidly shifting from the Inpatient setting to ambulatory settings–locations in which there is less experience in proven techniques in medical education.