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The state of California passed the Smoke-Free Workplace Act on January 1, 1995. This legislation effectively banned indoor smoking in all public and private workplaces including restaurants. Many restaurant owners, especially owners of restaurants that served alcohol, opposed the ban for fear that their businesses would be affected adversely because of the loss of patrons who smoked. Using an interrupted times-series autoregressive integrative moving average study design, the authors assess the effect of California's indoor smoking ban on revenue rates for all restaurants, for non-alcohol-serving restaurants, and for alcohol-serving restaurants. Results showed that revenues for alcohol-serving restaurants dropped by about 4% immediately following the establishment of the indoor smoking ban. However, this reduction was temporary because revenues for alcohol-serving restaurants quickly returned to normal levels. Findings also revealed that the indoor smoking ban had little observable impact on the revenue rate for restaurants overall and for non- alcohol-serving restaurants. [ABSTRACT FROM AUTHOR]