A major objective of the Population Health Impact of Disease in Canada (PHI) research program was to obtain Canadian-specific preferences for health states associated with various diseases, in order to estimate the morbidity component of summary measures of population health embodying the Canadian experience of disease. In this study, preferences for health states were elicited from lay panels (N=146) in nine Canadian communities (Vancouver, Edmonton, Saskatoon, Toronto, Ottawa, Montréal, Québec, Moncton and Halifax); the study was conducted from January to June of 2003. Information on health states was presented to raters using the CLAssification and MEasurement System of Functional Health (CLAMES), which assesses functional capacity using 11 health status attributes, each with four to five levels ranging from normal to severely limited functioning. Preferences for 238 health states classified by CLAMES were elicited using the standard gamble (SG) technique in both individual and group exercises. Mean preferences for these health states were then used to estimate the parameters of a log-linear scoring function for CLAMES. The function provides a convenient method of computing preference scores for any health state classified by CLAMES, without the need for direct measurement in surveys. Further, the SG appears feasible in group settings.