Community-based programs in the juvenile justice system present a promising alternative to the disappointing results achieved by large institutional facilities. A diverse group of states has found that intensive, individualized services provided in small, family-like residential settings or in the juvenile's own home yield comparable or reduced recidivism rates. The success of these programs appears to depend on how well they are managed, their diversity, and their intensity, all of which may be affected by state funding decisions. Community-based programs may also reduce costs. In-home placement with intensive supervision and community-based services are especially appropriate for the large numbers of nonviolent juveniles and those guilty of lesser offenses who often have been placed in traditional institutions. The tendency to widen the net of intervention may erode some of the cost-savings. States can use objective criteria to determine juvenile placements to ensure consistency and maximize efficiency. Although most states leave placement decisions to the courts, some states vest the youth corrections agency with this authority. Special advisory groups or community and school representatives sometimes participate by making recommendations to the courts. As state legislators face a new wave of youth in their high-risk years for juvenile crime and steadily increasing juvenile justice system costs, increased reliance on community-based programs may be an important new tool to maximize rehabilitation, minimize costs, and maintain public safety. (ABL)