The authors describe the parent-therapist program, an innovative alternative to residential treatment for emotionally disturbed children. In the program, which is based on the extended family model, couples not only provide a residential milieu for a child placed with them, but also are trained to be therapists who can deal with specific emotional and behavioral problems. The parent-therapists work together in three treatment teams, each consisting of five couples. Education and supervision are ongoing. A total of 27 children have been treated in the program since it got under way in May 1972. Clinical impressions indicate that the children have made substantial gains in developing social and interpersonal skills and in their academic achievement.