The historical development of halfway houses is traced in terms of the evolution of American correctional philosophy during the 19th and 20th centuries. Variables are then discussed which spurred the movement from reliance on the institution to acceptance of community-based programs. These variables are categorized as dissatisfaction with the prison, changes in correctional theory (towards a reintegrative model), and the mental health model as changing and developing in the same direction as the penal model. The conceptualization of community-based programs is examined, with a look at these four major theoretical precepts: (1) the treatment of offenders in the community is more humane than traditional methods; (2) diversion of individuals from traditional processing offers significant advantages to the offenders, the criminal justice system, and society; (3) gradual reintegration in the realistic setting of the community will be more effective than the prison and rehabilitation ideology; and (4) offender diversion and reintegration can be accomplished at less cost than incarceration. Facility management and administration issues are presented, particularly funding, private vs. public organization, cooperation with other components of the system, the use of boards, program content and quality, generalist vs. specialist programming, optimal number of clientele, and staffing. Finally, standards, goals, and future options for community-based corrections are briefly considered. Over 80 reference notes are included.