Community-based mental health systems of care for children, adolescents, and their families involve innovative approaches to improve access, utilization, financing, clinical efficacy, and cost-effectiveness of mental health services provided to children and adolescents within the context of their home communities. This model offers numerous advantages as rising needs for mental health services in an increasingly diverse population of children and families are recognized, while public and private resources are increasingly stressed. This report reviews the history of the development of this model, its basic principles, its emerging research literature, and its application within a managed care context.