Objective: We examined the relationship between workplace smoking policies and smoking prevalence and cigarette consumption. Methods: California residents were questioned by telephone with the 1990 California Tobacco Survey. All respondents (11 704) above age 18 years who were employed indoors were used. Respondents were asked about smoking status, workplace smoking policy, desire to quit, and smoking history. Logistic regression was used to determine the relationship of workplace smoking policy to smoking status, accounting for demographic variables. Results: Prevalence of regular smokers was significantly lower in smoke-free workplaces than in those with no restrictions (13.7% vs 20.6%, P<.001). Continuing regular smokers in smoke-free workplaces smoked fewer cigarettes than those in workplaces with no restrictions (296 vs 341 packs per year, P<.001). More comprehensive smoking policies were associated with smokers more likely to contemplate quitting (P=.014). Conclusions: Employees in smoke-free workplaces have a lower smoking prevalence and, among continuing smokers, lower cigarette consumption than individuals working where smoking is permitted. We estimate cigarette consumption among employees indoors is 21% below that if there were no smoking restrictions in California workplaces. Furthermore, if all California workplaces were smoke-free, cigarette consumption among employees would be 41% below that if there were no workplace smoking restrictions, approximately a $406 million annual loss in sales to the tobacco industry. This study supports the hypothesis that smoke-free workplace policies are an effective public health measure for decreasing smoking prevalence and cigarette consumption among continuing smokers. © 1993, American Medical Association. All rights reserved.