The lessons from decades of legalistic drug policies suggest that deterrence strategies have not been successful in reducing drug use. Enforcement strategies have consumed resources, aggravated the health risks associated with drugs, and increased the levels of violence associated with drug markets. Drug policy has also increased profits for drug sellers and attracted other youth into selling. Severe sentencing laws applied broadly and indiscriminately have undermined, rather than reinforced, the moral authority of the law. Policies should focus on reducing the harmful consequences of drug use and place criminal penalties within a framework that recognizes the scale of drug problems. Enforcement and prosecution should be used to disrupt mid-level and upper-level trafficking, and treatment or alternative sanctions should be used to reduce drug demand among offenders whose drug use has brought them into the criminal justice system. The cornerstone of a new drug policy should be to increase alcohol and drug treatment opportunities at all stages of the criminal justice system. Drug policy should include treatment- oriented drug courts, community mobilization to disrupt drug markets and deter drug users, prevention strategies that target specific drugs and populations, and the targeting of drug treatment toward high-rate and high-risk segments of the population. The enforcement and funding of drug policy should be shifted downward to the States. The Federal Government should focus on the development of knowledge, technology, data, and information within a policy infrastructure. 9 notes, 17 references, and a research agenda