The incarceration capacity in Texas is expected to double in 1996, but crime prevention involves more than imprisonment. Crime is viewed as a moral and ethical issue that has resulted from a cultural crisis involving families, schools, communities, and churches. Therefore, incentives should be provided to encourage youth to follow society's rules, alternative schools and juvenile probation should be available to influence those who break the rules to act responsibly again, and punishment should be imposed fairly and effectively to punish youths who commit violent acts. Juvenile justice policy goals should be to establish a continuum of incentives and disincentives, to make service delivery more rational and accountable, and to make incentive funds available for community empowerment. Issues of significance in the juvenile justice system that concern incentives, diversion, and punishment are outlined. 8 figures