This report was commissioned to provide a rapid appraisal of the health system in Sri Lanka, particularly focussing on issues of poverty reduction and the challenges of the demographic and epidemiological transition. It is envisioned that this document will provide guidance to the health sector in order to make the Sri Lankan health system more responsive to the needs of the poor and the marginalised and provide them with better access to quality health services. The study attempts to analyse the present health care system by identifying the most salient problems of the system: malnutrition, mal-distribution of resources and structural deficiencies in health care provision that result simultaneously in under-utilization and overcrowding at different levels of hospitals. This report highlights many areas where WHO cooperation with the Ministry of Health and other stakeholders would be fruitful in improving quality, level and distribution of health services within the country.