OBJECTIVE: To develop a conceptual framework for monitoring the relationship between health services and health outcomes in rural Australia. DESIGN AND SETTING: Development of an evaluation framework for a rural comprehensive primary health service in Victoria. RESULTS: Evidence regarding essential components for successful primary health care, and objective health service and health status measures were combined to develop a conceptual health service evaluation framework. Application of the framework is illustrated using a case study of a rural primary health service in Victoria. CONCLUSIONS: Inadequate health services limit access to health care, delay use at times of need and result in poor health outcomes. Currently, there is a lack of evidence from rigorous health service evaluations to indicate which rural health services work well, where and why that could inform rural health policies and funding. Although the nature of health service models will vary across communities in order to meet their differing geographic circumstances, there is considerable scope for the translation and generalisation of evidence gained from health service models that are shown to be sustainable, responsive and able to deliver local quality health care. This framework can guide future health service evaluation research and thereby provide a better understanding of a health service's impact on the health of the community and its residents.