This article summarizes a University of California chemicals policy report commissioned by the California Legislature. The report makes the case that long-standing weaknesses in the Toxic Substances Control Act have produced a flawed chemicals market in the U.S. that "undervalues" the hazardous properties of chemicals relative to their function, price, and performance. These market conditions have dampened industry interest in cleaner chemical technologies, such as green chemistry. A new U.S. chemicals policy will need to improve the flow of chemical information; enhance the capacity of government to control chemical hazards; and increase public investments in green chemistry research and education.