Drug paraphernalia and prescription laws make syringe exchange programs (SEPs) illegal in most states in the U.S. Nonetheless, SEPs have been started in 25 states and the District of Columbia as of September 1995. In some states like California and New Jersey, SEPs have operated despite police arrest of volunteers and clients. We examine the impact of police action and threat on SEPs by comparing an underground syringe exchange site (SES) in West Oakland to a tolerated SES in the Fillmore neighborhood of San Francisco. The following data sources are utilized: demographic and service utilization data from Alameda County Exchange (ACE) in West Oakland and Prevention Point Needle and Syringe Exchange (PPNSE) in the Fillmore, San Francisco; demographic and syringe exchange utilization information collected from street-recruited samples of injection drug users (IDUs) in West Oakland and the Fillmore; and participant observation of SES in these two communities. We found that police action and the threat of police action in West Oakland decreased utilization of SEP by IDUs, limited the number and diversity of volunteers at SES, and inhibited the operation and expansion of SEP.