Challenges facing States in juvenile justice are protecting the public, reducing juvenile recidivism, controlling costs, determining who makes placement decisions, and helping juvenile offenders and their families. Placement alternatives for juvenile offenders include detention centers, transfer to adult courts, secure facilities, observation and assessment facilities, adventure programs, many types of residential community programs, and in-home placement with varying supervision levels. Massachusetts, Utah, Florida, and Maryland have found that intensive, individualized services provided in small, family-like residential settings or in the juvenile's own home yield recidivism rates comparable to or less than large institutions. The success of these programs apparently depends on how well they are managed, their diversity, and their intensity, all of which may be affected by State funding decisions. 3 figures, 15-item bibliography.