This paper examines the factors causing the escalation in the 1980s and subsequent leveling off of nuclear power plant non-fuel Operating and Maintenance (O&M) costs. Over the period 1974-93, real (inflation-adjusted) non-fuel O&M costs escalated from about $23 to about $97 per kilowatt of installed capacity (kW). However, much of the escalation in costs occurred in the 1980s. Over the period 1975-87, real O&M costs escalated at an annual rate of about 11 percent. Since then, the annual growth rate in real O&M costs fell to about 1 percent. The research found that the escalation in O&M costs was primarily due to increased regulatory activity by the Nuclear Regulatory Commission. More important, there is little evidence that the moderation in the growth in O&M costs was regulatory induced, but instead was due to changes in the economic incentives to improve plant performance.