Published research on the topic of mutual fund performance focuses almost exclusively on pretax returns. For U.S. mutual fund investors holding positions in taxable accounts, however, what matters is the after-tax performance of their portfolios. We analyzed after-tax returns on a large sample of diversified U.S. equity mutual funds for the 1981–98 period. We found the variables that determined after-tax performance for this period to be past pretax performance, expenses, risk, style, past tax efficiency, and the recent occurrence of large net redemptions.