Study data came from ethnographic data collected through participant observation and intensive semistructured interviews with program personnel. Supplementary data were collected in interviews focusing on the history of syringe exchanges and their transition to legal status. Program records provided an additional data source. Findings revealed that following legalization of needle exchange programs, their increased legitimacy and funding allowed all three programs to expand their size and scope by such means as adding hours, sites, referral services, and the ability to support user groups. The result was a rapid growth in participation to more than 15,000 persons in 18 months. Findings also indicated that the regulation that accompanied legalization posed significant challenges to the program. These challenges included added record-keeping and reporting tasks, increased demand for referrals, and evaluation requirements. These challenges all affected staffs that were already overburdened. Findings indicated that the transition process poses significant challenges to these developing organizations, as well as opportunities for improved services. Tables, figure, and 25 references