To facilitate the banning of tobacco industry sponsorship, Australian health promotion foundations were established to provide health sponsorship to sport, arts, and racing organizations. Health sponsorship dollars procure health sponsorship benefits such as naming rights, signage, personal endorsement of a (health) product by a performer or player, and structural controls such as smoke-free policies. Data are presented from surveys and observations of spectators attending events sponsored by the West Australian Health Promotion Foundation (Healthway) and surveys of Healthway-sponsored organizations and the community. The results demonstrate that by using health sponsorship, Healthway increased the prevalence of smoke-free policies in recreational settings, and there was growing support for these policies. There was evidence of good compliance with smoke-free policies, thus reducing exposure to environmental tobacco smoke. The introduction of smoke-free policies in recreational settings has involved working collaboratively with sectors outside of health, taking an incremental approach to change, and gaining the support of stakeholders by communicating evaluation results.