Side-effects from conventional antipsychotic drugs, in particular extrapyramidal side-effects, limit their use for some patients, lead to non-compliance and may adversely affect the quality of life of others. Newer, more expensive, 'atypical' antipsychotics have been developed in attempts to address these problems, although debate about the most appropriate role for these medications remains. To examine variations in prescribing of the 'atypical' antipsychotics in primary care, over a 5-year period. All 13 health authorities within the West Midlands region. Cross-sectional analysis of prescribing analysis and cost (PACT) data for atypical antipsychotic drugs (amisulpride, clozapine, olanzapine, risperidone, sertindole, and zotepine) was performed using one-way analysis of variance. To test whether the differences reflected variation in local population need, the prescribing data were adjusted using Mental Illness Needs Index scores. Regression analysis was used to examine the relationship between the overall levels of prescribing and local population need. The total volume of prescribing of atypical antipsychotic drugs in primary care increased nearly six-fold from 1996/97 to 2000/01 in the West Midlands region. Olanzapine was the most commonly prescribed drug during 1999/2000, accounting for 45% of defined daily doses, while risperidone accounted for 38% of the total. In 1996/97, a four-fold variation in rates of atypical antipsychotic prescribing between health authorities was found, compared with a three-fold variation in 2000/01, after adjusting for measures of local population need. There has been a substantial increase in the prescription of atypical antipsychotics in primary care over the last 5 years, but the rate of increase has varied widely between health authorities. Further studies are needed to determine the factors that have led to these differences in uptake, and the likely impact of national guidance on future prescribing patterns.