In 2000, California voters approved a Substance Abuse and Crime Prevention Act of 2000, also known as Proposition 36. This act allows adults convicted of nonviolent drug possession to choose drug treatment in the community in lieu of incarceration. The initial findings from the five counties participating in the study (Kern, Riverside, Sacramento, San Diego, and San Francisco) of Proposition 36’s impact on the drug treatment system have been encouraging both in progress made in Proposition 36’s implementation and in meeting some of the study's initial objectives. Due to selection criteria, the five counties demonstrated tremendous diversity with respect to treatment approaches, urine testing policy, and patient mix. However, there were also similarities across the counties; common issues identified by counties in the first year of Proposition 36’s implementation include identifying and treating duly diagnose patients, providing services for patients having greater than expected needs for intensive treatment, and meeting the housing needs of the homeless. Counties also shared concerns of continued State funding due to the State’s projection of a large deficit in the next fiscal year. Except for San Francisco, treatment admissions increased during the first year of Proposition 36’s implementation over the prior year, mostly in outpatient drug-free programs. Proposition 36 patients were more likely to be men, first-time admissions, treated in outpatient drug-free programs, employed full-time, and users of methamphetamine or marijuana. Tables, figure, notes, and references