This article summarizes the pathophysiology of gastroesophageal reflux disease (GERD) and the wide spectrum in disease and symptom severity as they influence the selection of cost-effective treatment strategies. The vast majority of patients with GERD have mild symptoms, no gross endoscopic evidence of esophagitis, and little risk of developing complications. More than 85% of patients with GERD symptoms have uncomplicated disease. Diffuse ulcerations or complications (grade III or IV esophagitis) occur in only 3.5% of patients < 65 years of age. However, some patients with GERD can develop severe complications, including esophageal obstruction, significant blood loss, and, in rare circumstances, perforation. Furthermore, adenocarcinoma of the esophagus, which is increasing in incidence faster than any other cancer, is caused by GERD. Although severe ulcerations are uncommon in young patients, they occur in 20-30% of patients over age 65. Patients with ulcerative esophagitis are not only more prone to develop complications, they are also more resistant to treatment. Cost-effective medical management of GERD must take into account the wide spectrum of symptom and disease severity. Therapy consists of both nonpharmacologic treatment and the appropriate use of medications from several classes of drugs, either alone or in combination. Traditionally, prokinetic agents or histamine receptor antagonists have been used as primary therapy; proton-pump inhibitors are reserved for more resistant cases. The rationale for this and for alternative approaches is discussed.