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As Hong Kong is a compact city with limited available land and high land prices, the construction of high-rise buildings is prevalent. The construction industry produces a significant amount of building waste. In 2005, about 21.5 million tonnes of construction waste were generated, of which 11% was disposed of in landfills and 89% in public filling areas. At the present rate, Hong Kong will run out of both public filling areas and landfill space within the next decade. The government is taking action to tackle the problem, such as by introducing a construction waste landfill charge, and promoting prefabrication to reduce on-site waste generation. This paper reports an ongoing study on the use of prefabrication in buildings and its impact on waste reduction in Hong Kong. A questionnaire survey was administered to experienced professionals, and case studies of recently completed building projects were conducted. The results revealed that construction waste reduction is one of the major benefits when using prefabrication compared with conventional construction. The average wastage reduction level was about 52%. This implies that a wider use of prefabrication could considerably reduce construction waste generation in Hong Kong and alleviate the burdens associated with its management.