The authors contend that the most plausible explanation of the decline in heroin prices is due to the influx of high-purity heroin from Southeast Asia. The expansion in Southeast Asian heroin supply also seems to account for much of the increase in heroin seizures. At the same time, heroin consumption in the United States has been increasing. New heroin users represent a particular concern, since heroin use spreads primarily among friends and peers. Low heroin prices reduce economic barriers to experimentation, while high-purity heroin used intranasally or inhaled rather than intravenously reduces barriers created by stigma and fear of infection. In addition, low heroin prices ease the financial pressure on addicts to commit crimes in order to support their habits. While there is little evidence of rising heroin initiation rates among young users without prior hard drug experience, low prices and high purities pose the threat of an increase in the heroin-using population. The gravity of this threat suggests the need for more intensive monitoring efforts. Recent trends in heroin availability and supply are examined from an interdiction perspective, and data on heroin seizures are provided. Consideration is given to the effects of wholesale changes on retail conditions in the heroin market, the effects of retail conditions on heroin consumption, and the effects of supply conditions on drug-related harm. Supplemental tables and charts and the interview questionnaire used to obtain heroin data are appended. 18 tables and 3 figures