The study sought to determine whether gangs sell drugs on a freelance basis of whether their drug dealing is more organized. Data came from observations and extensive field work over many years, starting when the author directed Milwaukee's first gang diversion program and became acquainted with many gang founders and leaders. Some of the data came from studies in 1987 and 1992; other information came from confidential interviews conducted in 1992 and 1993 with 101 founding members of 18 gangs. The participants included 90 males and 11 females; 60 percent were black, 37 percent were Hispanic, and 3 percent were white. Results revealed that inflexible, vertically organized drug businesses were unlikely to be successful and that this type of entrepreneurial gang failed in Milwaukee. Instead, most gang drug sales in Milwaukee were by neighborhood-based, loosely organized operations. Neighborhood-based drug- selling organization varied according to the profitability and stability of the drug market. The complexity of the organization generally varied inversely with the extent that drug sales were centered on the neighborhood as a market. Findings also suggested that ethnicity may also have an independent effect on organization. Results indicated that research needs to give more attention to organizational theory and the neighborhood context of gang activities and organization. Tables, interview excerpts, notes, and 55 references