Analysis of health care utilization is very important for health care policy development. Traditional studies of health care utilization were focused on measuring the level of health care utilization and on analyzing the determinants of health care utilization in the defined areas and populations. But there were some limitations in comparing the health care utilizations rates in traditional studies because so many factors were to be considered. Small area analysis is a method used to demonstrate substantial variations in health care utilization with popualtion-base use rates among similar geographic areas. This review discusses the methods, magnitude and trend of geographic variations, factors influencing small area variations, and makes suggestions for further study. Finally, the article discusses the necessity and feasibility of small area analysis in Korea.