There is considerable international interest in the use of performance measurement and their public release in order to improve the quality of care. However, few studies have assessed stakeholders' awareness and use of performance data. Iranian hospitals have been graded annually since 1998 and hospital hotel charges vary by grade, but this system has never been evaluated. We conducted a cross-sectional survey of 104 outpatients at eight Teheran hospitals and 103 general practitioners (GPs) to assess the awareness of and attitudes towards hospital grading system. Only 5.8% of patients (95% CI: 1.3-10.3%) and 11.7% of GPs (95% CI: 5.5-17.9%) were aware of grading results. Patients' awareness was positively associated with their education level (P = 0.016). No patient used the grading results for choosing a hospital and only one GP (1%, 95% CI: 0-2%) reported using hospital grade to influence referral decisions. Patients were more influenced by hospitals' public reputation and that of their specialists. GPs believed that the grading system did not reflect the quality of care in hospitals. When developing performance measurement systems, public release of data should be accompanied by evaluation of its impact on awareness and health-care choices.