Five counties (Kern, Riverside, Sacramento, San Diego, San Francisco) that demonstrate both variations and similarities in their implementation of Proposition 36 (e.g., treatment approaches, urine testing) and patient mix have been selected to participate in a study assessing how California's Proposition 36 is affecting the drug treatment system and patient outcomes. Except for San Francisco, treatment admissions increased during the first year of Proposition 36 implementation over the prior year (27% in Kern, 21% in Riverside, 17% in Sacramento, and 16% in San Diego), mostly in outpatient drug-free programs. Compared to non-Proposition 36 patients, Proposition 36 patients were more likely to be men, first-time admissions, treated in outpatient drug-free programs, employed full-time, and users of methamphetamine or marijuana. They were less likely to be treated in residential programs or methadone maintenance programs and fewer reported heroin use or injection drug use. Guided by the multilevel open systems framework, the study examines key issues of Proposition 36 that influence treatment systems and outcomes and empirically identifies "best practice" approaches in treating drug-abusing offenders.