There has been a rapid growth of healthcare technology assessment (HTA) activities among health service researchers and physicians in Japan in the younger generation since the mid-1980s. HTA has become visible since the Ministry of Health, Labor, and Welfare (MHLW) set up the several committees related to HTA in the late 1990s. The MHLW had to participate in regulatory and administrative reform, coping with the serious economic stagnation since 1991, following the economic recession in the 1980s. However, HTA has not been developed as expected. The most important failure is that the application of HTA to health policy has been neglected by the MHLW. Only application to clinical practice has been implemented by developing evidence-based clinical practice guidelines. The MHLW had the main aim of containing costs by reducing excess or useless healthcare services through guidelines, rather than to implement a radical reform. Without a central organization for HTA, several researchers have still continued to do HTA studies, but most researchers and physicians promoting HTA have been moved into diverse related areas. Ultimately, increasing efficiency may be the only way of reconciling rising demands for health care with public financing constraints. Therefore, the reconsideration and reorganization of HTA, which covers not only healthcare services but also the healthcare system as a whole, is becoming an urgent matter for healthcare reform.