Past research on the cost structure of urban bus transportation shows conflicting results with respect to key economic issues such as economies of scale and other properties of the underlying technology. It is hypothesized that these results stem from three major problem areas: the form of the estimated cost model, definition of the output measure, and major characteristics of the data base. Utilizing longitudinal data from one bus property, this study estimates a general cost model which places very few a priori restrictions on the production structure. In addition, two different output measures are defined, and the cost model is estimated separately for each. Results of the study presented in this paper indicate that the general form cost model better represents bus transit technology than other more restrictive models, and that different output measures have a significant effect on the measurement of economies of scale. Results pertaining to factor substitution, separability, and homotheticity are also presented.