The community of health services researchers in general internal medicine has played an important role in affecting health policy at the national and state levels. Community-based participatory research (CBPR) offers health services researchers an opportunity to identify and address health policy questions at the local level. We present the following four mechanisms by which CBPR might increase the ability of health services researchers to impact health by informing local policy. CBPR benefits community partners by allowing them to participate directly in the research process, gives academic researchers access to local data, enhances interpretation of research findings through an understanding of local context, and provides a natural infrastructure for affecting local policy through its community partners. For each of these mechanisms, we describe one example from a CBPR project conducted by one of us (M.O.). Considering the challenges and opportunities of conducting CBPR, future efforts will help describe how this emerging research paradigm can complement traditional health services research to most effectively inform health policy at multiple levels.