A computerized search of the literature on managed care was done using the Health Planning and Administration and the MEDLINE databases. There were 1,892 articles indexed between 1987 and 1993. Additional citations were retrieved through a manual literature search. On the basis of this information, a reading list was compiled for psychiatric residents and faculty. Several psychiatrists were consulted during the selection process. It is important to teach the principles of managed care to psychiatric residents and integrate managed care practice into medical school and residency training, and for this purpose the annotated bibliography will serve as a useful instructional tool.