The concepts of target efficiency can be used to assess the extent to which service provision is in line with the needs of the population. Horizontal target efficiency denotes the extent to which those deemed to need a service receive it and vertical target efficiency is the corresponding extent to which those who receive services actually need them. The aim of this study was to assess the target efficiency of the Swedish eldercare system and to establish whether target efficiencies differ in different geographical areas such as large urban, midsize urban and rural areas. Vertical efficiency was measured by studying those people who received eldercare services and was expressed as a percentage of those who received services who were functionally dependent. To measure horizontal target efficiency, data collected at baseline in the longitudinal population study SNAC (Swedish National study on Aging and Care) during the years 2001-2004 were used. The horizontal efficiency was calculated as the percentage of functionally dependent persons who received services. Functional dependency was measured as having difficulty with instrumental activities of daily living (IADL) and/or personal activities of daily living (PADL). Services included long-term municipal eldercare services (LTC). Horizontal target efficiency for the public LTC system was reasonably high in all three geographical areas, when using dependency in PADL as the measure of need (70-90 %), but efficiency was lower when the less restrictive measure of IADL dependency was used (40-50 %). In both cases, the target efficiency was markedly higher in the large urban and the rural areas than in the midsize urban areas. Vertical target efficiency showed the same pattern-it was almost 100 % in all areas for IADL dependency, but only 50-60 % for PADL dependency. Household composition differed in the areas studied as did the way public long-term care was provided to people living alone as compared to those co-habiting.