The feasibility and potential impact of so-called smart handguns has generated considerable public interest and debate. This report summarizes a June 2002 workshop at the National Academy of Engineering that examined three related issues: the state of technology for owner-authorized handguns; the role of product liability in the development and marketing of such firearms; and the potential impact of these smart guns on health and crime. Smart-gun technology has the potential to prevent unintended or undesirable uses of handguns, such as accidental shootings; the shooting of police officers by assailants using the officers' own weapons; suicides; homicides with stolen handguns; and other gun-related crimes. However, information presented at the workshop suggests that considerably more research is needed to bring a reliable and commercially viable product to the marketplace. The report also notes that the impact of smart-guns will be influenced by legal issues, human behaviour, economic conditions, and other factors.