The importance of evaluating systematically the effectiveness of hospice care has been noted for at least 20 years. There is, however, limited evidence about whether and how the care provided to terminally ill patients by in-patient hospices in the UK differs from that provided in NHS hospitals. In this article, we, therefore, present a comparison of hospice in-patient care and hospital care for cancer patients in the UK, from the perspective of bereaved relatives who had experienced both types of care during the last 3 months of the patient's life. The Office of National Statistics drew a random sample of 800 deaths in South London in 2002, and sent the person who registered the death (the informant) a Views of Informal Carers - Evaluation of Services (VOICES) questionnaire 3-9 months after the death, with up to two reminders. There was a response rate of 48%. For this analysis, 40 cancer patients whose informant reported both a hospice in-patient admission and a hospital admission in the last 3 months of life were identified. Informants answered the same questions about each admission and responses on these were compared. There were statistically significant differences between respondents' views of hospice and hospital care on eight out of 13 variables measuring aspects of satisfaction with care, with a trend towards statistical significance on a further two: in all cases respondents rated hospice care more positively than hospital care. There were no differences in the experience of pain and breathlessness in the two settings, but respondents rated pain control by the hospice as more effective. In comparison to hospital care, from the perspective of bereaved relatives, hospice in-patient care provided better pain control, better communication with patients and families, and better medical, nursing and personal care, which treated the patient with more dignity. Further research is needed to confirm these findings using a wider sample of in-patient hospices in the UK and including the perspectives of patients. Providing high quality care for terminally ill patients in acute hospitals remains an important challenge.