A municipal government’s worksite exercise program was evaluated to determine its effect upon health care costs and employee absenteeism. Thirty-two employees who had participated for four and one-half years were compared to 32 nonparticipating employees. Results of this evaluation indicated that participants were significantly more often female, younger, higher paid, and in higher job classifications. No significant differences in smoking status and marital status were observed between groups. Results also revealed that participants did not use significantly fewer sick hours or health care dollars as compared to nonparticipants. However, after an initial increase in both variables the year after the program began, reductions were seen for participants in the following years. An evaluation of data prior to installation of the program showed that those joining the exercise program were not already using significantly fewer health care dollars or sick days than nonparticipants. Focus groups conducted with nonparticipants disclosed that most employees know exercise is beneficial; however, nonparticipation was largely due to a lack of time to exercise. Findings of this research suggest that health care costs and absenteeism can be reduced over time by implementing worksite exercise programs. Worksite exercise programs need to be marketed toward older, male, lower paid workers in lower job classifications since these groups tend to not join as readily as workers who are younger, female, and higher paid. / Master of Science