Reducing racial and ethnic disparities in the quality of health care is a national policy priority; collecting race and ethnicity data from patients is a necessary first step in identifying and addressing these disparities. Recognizing this, Boston and Massachusetts recently enacted race and ethnicity data collection regulations affecting all acute care hospitals in the city and state. This paper describes the regulations and early lessons learned from implementing these data collection efforts in three areas: the design of data collection tools, uses of the data for eliminating disparities, and the role of the policy process in such efforts.