This paper presents high-cost illness data from the first public use data file released on the 1977 National Medical Care Expenditure Survey. Characteristics of families which incurred out-of-pocket expenditures for personal health services that exceeded 5, 10, and 20 percent of their income in 1977 are described including: (1) demographics; (2) use of health care services; (3) total and out-of-pocket expenses, and (4) sources of payment. Findings are presented that depict families with a high ratio of out-of-pocket expenses to income as being more likely to be headed by someone under 18 or over 65 years of age, unemployed, and with lower income. Implications of the findings are examined, including the identification of two distinct types of families that have high out-of-pocket expenses: those for whom a high-cost illness resulted in high personal expenses in spite of good insurance coverage, and those for whom relatively small out-of-pocket expenses represented a high percentage of their income due to a combination of low income and inadequate health care coverage. The issue of catastrophic health care expense is addressed. The appendices describe the calculation and interpretation of relative errors and the method used to calculate the standard errors, the formation of confidence intervals, and the evaluation of differences among estimates. Two figures and 34 data tables are included. (NB)