Healthcare decision-makers have always faced the challenge of allocating finite resources, but the global economic downturn places extra pressure on health systems to meet rising demands. The National Institute for Health and Care Excellence (NICE) and UK government have therefore called on commissioners to consider opportunities for 'disinvestment'- the cessation or restriction of health-care practices, and subsequent shift of resources to higher value care. However, there are no clear guidelines on how to approach disinvestment, and little is known about how this is tackled in practice. This paper presents results from a study that used ethnographic methods to investigate how disinvestment is understood and enacted. Eight routine local-level commissioning meetings where resource allocation decisions were discussed were observed over one year in two demographically contrasting regions of England. 28 interviews accompanied observations, conducted with purposefully-sampled professionals who were involved in, or potentially impacted by, disinvestments. Analysis of interviews/meeting recordings was undertaken using constant comparison methods, complemented by observational field notes. We found variation in informants' reported definitions of disinvestment, and an absence of disinvestment decision-making in observed meetings. Observations and interviews showed evidence of practical and ideological barriers to disinvestment, including an absence of tools and capacity, difficulties in collaboration and communication, a reluctance to engage in explicit rationing, and a perceived lack of central/political support. These findings support the need for the development of methods to encourage and guide disinvestment, including a clear definition of what 'disinvestment' entails. Crucially, disinvestment needs to be a collaborative effort, involving health-care providers and commissioners in decision-making processes.