Effectiveness of physical exercise in reducing work-related musculoskeletal stress was investigated. This was compared to the stress alleviation accomplished by using ergonomically designed work station. Tasks chosen for the study were data entry and file maintenance on the video display terminal (VDT). Three different measures, namely root-mean-square (RMS) values of electromyogram (EMG), subjective rating and task performance were used for the evaluation. Electromyograms were recorded from the neck, the left and right trapezius muscles in the shoulder region, and L2/L3 region of the back. Subjects rated discomfort levels for the same parts of their body. Task performance was measured by recording typing speed and errors. Each of the five subjects was tested for two days (8 hours/day) in two different work stations. These were the ergonomically designed adjustable work station and the fixed work station of traditional design with no adjustable features. Assigned physical exercises were performed for four minutes, every two hours during the breaks, by the subjects while working in the fixed work station. It was concluded that the physical exercise could be helpful in reducing musculoskeletal stress as effectively as the ergonomic design of the VDT work station.