Objectives: To estimate the current uses level of ambulatory computerized physician order entry (A-CPOE) among physicians and to examine the relationship of managed care penetration as well as other market and practice characteristics to use of A-CPOE by physicians. Data Sources: This study uses both primary and secondary data sources. The primary data source was a large-scale survey of physicians' use of information technologies in Florida. Secondary data on managed care penetration were obtained from the Florida Agency for Health Care Administration, and other market-level data were extracted from the area resource file. Methods: A hierarchical logistic regression model was used to examine the correlation of county-level and practice-level characteristics with physicians' self-reported use of A-CPOE systems. Results: Overall, 1360 physicians (32.4%) indicated use of an A-CPOE system. Findings suggest that 1% more managed care penetration was associated with 2.1% lower use of A-CPOE (P = .003). Additionally, practice size, multispecialty affiliation, and primary care practice were significantly and positively correlated with the use of A-CPOE. Physician age was negatively associated with A-CPOE use. Conclusion: Managed care organizations may experience significant financial savings from A-CPOE use by physicians; however, managed care penetration in a community negatively affects A-CPOE use among physicians in their practices. Further study regarding the causal nature of this association is warranted.