In 1985 the Robert Wood Johnson Foundation implemented the Program on Chronic Mental illness, which provides grants and assistance to nine cities across the country in their efforts to improve services to persons with chronic mental illness. A basic premise of the program is that a central mental health authority is the cornerstone of improved systems of care. To be eligible for participation in the program, each city had to develop a service system incorporating a central authority and four other features: continuity of care, a full range of services, a housing plan, and new sources of financing. The authors describe how the cities were selected and how the program operates. They also provide a case example of the problems one city faced in establishing a central authority.