Smart Start is a broad-based community initiative to ensure that all of North Carolina's children arrive at school healthy and ready to learn. This study examined the effect of Smart Start on the quality of child care from 1994-1996. Data were collected from child care centers in 12 counties implementing the initiative. Data collectors visited 180 child care centers in 1994 and 187 in 1996. The quality of child care was measured using the Early Childhood Environment Rating Scale. Findings indicated that the quality of child care was significantly higher in 1996 than 1994, across both the entire sample and the subset of 91 centers observed both years. The quality of child care in 1996 was significantly related to the level of participation in local quality improvement activities by the child care centers, and to the percent of full-funding counties received and the proportion of this funding that the county chose to spend on child care. These latter two variables interacted such that the proportion spent on child care was significantly more related to ECERS quality in the counties that received a higher percentage of their full-funding amount. The data indicate that child care was significantly improved after 2 years of Smart Start implementation and that factors associated with program participation were significantly related to the change. (JPB)