A basic premise of the paper is that the unique demographic, cultural, and jurisdictional attributes of Canada provide a framework in which unlimited potential exists for the development of restorative juvenile justice initiatives, despite political and legislative obstacles. Canada has long had a lead role in developing and implementing alternative justice policies and programs. The first modern victim-offender reconciliation project began in Ontario in 1974, More recently, Aboriginal peoples and communities have served as the catalysts for the development of innovative, community-based restorative justice practices, including circle sentencing, a community holistic healing program, a community-based sex offender treatment program, and youth justice committees. Both Aboriginal and non-Aboriginal communities are experiencing an increasing interest and involvement in the development of community-based restorative justice programs. Central elements of Canadian juvenile justice policy and practice and the current political context present serious but not insurmountable challenges for restorative youth justice. Issues requiring attention include the need to define and make operational the principles of restorative justice, to address the role of juvenile justice personnel, the development of evaluative criteria, and others. The survival and growth of restorative community justice will challenge both governments and communities to reach compromise, seek consensus, and assume risks. Accomplishing these tasks will give restorative justice the potential to transform juvenile justice in Canada in positive ways. Appended task force recommendation and 25 references