Telemedicine services are being increasingly used. Although insurers and other payers are covering some services in the USA, the rationale for these coverage decisions is not always evidence-based. We reviewed the literature for telemedicine services that substitute for face-to-face medical diagnosis and treatment. We focused on three types of telemedicine services: store-and-forward, home-based and office/hospital-based services. Studies were included if they were relevant to at least one of the three study areas, addressed at least one key question and contained reported results. We excluded articles that did not study a service requiring face-to-face encounters (i.e. teleradiology was excluded). Our search initially identified 4083 citations. After review, 597 were judged to be potentially relevant at the title/abstract level. Following a full-text review, 106 studies were included. Store-and-forward services have been studied in many specialties, the most common being dermatology, wound care and ophthalmology. The evidence for their efficacy is mixed. Several limited studies showed the benefits of home-based telemedicine interventions in chronic diseases. Studies of office/hospital-based telemedicine suggest that telemedicine is most effective for verbal interactions, e.g. videoconferencing for diagnosis and treatment in specialties like neurology and psychiatry. There are still significant gaps in the evidence base between where telemedicine is used and where its use is supported by high-quality evidence. Further well-designed research is necessary to understand how best to deploy telemedicine services in health care.