Texas is one of 8 states that have received a Medicaid 1115 Transformation Waiver in which federal supplemental payments are being used to incentivize delivery system reform. Under the Texas Transformation Waiver's 5-year Delivery System Reform Incentive Payment (DSRIP) program, hospitals and other providers have established regional health care partnerships, conducted regional needs assessments, and developed and implemented projects addressing local gaps in service. The projects were selected from menus, supplied by the Texas Health and Human Services Commission and the Centers for Medicare & Medicaid Services, which defined acceptable infrastructure development and/or program innovation and redesign initiatives. Providers receive payment for planning the projects and achieving metrics and milestones related to project implementation and performance. This article describes the major features of the Texas DSRIP model and the resulting implementation and performance to date in the most populous region of the state.