This paper attempts an analysis of efficiency variation in health system performance in Karnataka. By using the stochastic frontier technique, it provides an idealised yardstick to evaluate the performance of the health sector. Carried out in two stages of estimation, the results of our model, using district-level panel data, indicate that the efficiency of the public health delivery system in Karnataka remains low. Considerable disparities across districts in per capita availability as well as utilisation of hospitals, beds and manpower inputs hamper improvements in life expectancy in the state. Results from the second stage of estimation suggest that in rural areas particularly, improvements in infrastructure facilities like safe drinking water supply, toilets and electricity as well as better coordination between social sector and economic policies, especially at the district level, may also help the state improve life expectancy speedily and more equitably in the deficient districts.