This paper deals with the optimal solution of ill-posed linear problems, i.e..linear problems for which the solution operator is unbounded. We consider worst-case ar,and averagecase settings. Our main result is that algorithms having finite error (for a given setting) exist if and only if the solution operator is bounded (in that setting). In the worst-case setting, this means that there is no algorithm for solving ill-posed problems having finite error. In the average-case setting, this means that algorithms having finite error exist if and only lf the solution operator is bounded on the average. If the solution operator is bounded on the average, we find average-case optimal information of cardinality n and optimal algorithms using this information, and show that the average error of these algorithms tends to zero as n→∞. These results are then used to determine the €-complexity, i.e., the minimal costof finding an €-accurate approximation. In the worst-case setting, the €comp1exity of an illposed problem is infinite for all €>0; that is, we cannot find an approximation having finite error and finite cost. In the average-case setting, the €-complexity of an ill-posed problem is infinite for all €>0 iff the solution operator is not bounded on the average, moreover, if the the solutionoperator is bounded on the average, then the €-complexity is finite for all €>0.