There is an emerging trend within healthcare to introduce competency-based approaches in the training, assessment, and development of the workforce. The trend is evident in various disciplines and specialty areas within the field of behavioral health. This article is designed to inform those efforts by presenting a step-by-step process for developing a competency model. An introductory overview of competencies, competency models, and the legal implications of competency development is followed by a description of the seven steps involved in creating a competency model for a specific function, role, or position. This modeling process is drawn from advanced work on competencies in business and industry.