The public sector in developing countries is increasingly contracting with the non-state sector to improve access, efficiency and quality of health services. We conducted a multicountry study to assess the range of health services contracted out, the process of contracting and its influencing factors in ten countries of the Eastern Mediterranean Region: Afghanistan, Bahrain, Egypt, Islamic Republic of Iran, Jordan, Lebanon, Morocco, Pakistan, the Syrian Arab Republic and Tunisia. Our results showed that Afghanistan, Egypt, Islamic Republic of Iran and Pakistan had experience with outsourcing of primary care services; Jordan, Lebanon and Tunisia extensively contracted out hospital and ambulatory care services; while Bahrain, Morocco and the Syrian Arab Republic outsourced mainly non-clinical services. The interest of the non-state sector in contracting was to secure a regular source of revenue and gain enhanced recognition and credibility. While most countries promoted contracting with the private sector, the legal and bureaucratic support in countries varied with the duration of experience with contracting. The inherent risks evident in the contracting process were reliance on donor funds, limited number of providers in rural areas, parties with vested interests gaining control over the contracting process, as well as poor monitoring and evaluation mechanisms. Contracting provides the opportunity to have greater control over private providers in countries with poor regulatory capacity, and if used judiciously can improve health system performance.