This annual report on applicants to the 1977--78 U.S. medical school freshman class describes the first substantial decline in applicants during the past quarter century. Since the decline was accompanied by the opening of several new medical schools, the chances of gaining admission improved to 39 percent, the highest in six years. For applicants making their first attempt the acceptance rate was 43 percent. There was no loss of qualified applicants, however; the 1977--78 pool presented record-high entrance test scores and undergraduate college grades. In the report comparisons are made with activity in 1974--75--the peak year for medical school spplicants--in order to measure the impact of the decline on individual medical schools and geographical regions and on various applicant subpopulations.