Since World War II, the federal government has maintained a partnership with the nation's research universities, based on the bipartisan consensus that (1) the nation needs to invest its resources in curiosity-driven, competitively awarded basic research, and (2) basic research is best conducted at the nation's universities. As a result of that partnership, the federal government supports 60 percent of the research performed at universities. While U.S. colleges and universities perform just 13 percent of total national research and development (R&D) funded by government and the private sector, they perform 56 percent of the nation's basic research, an element critical to the success of the overall enterprise. Basic research creates the building blocks of future products and processes--some of which may be developed quickly and some of which may be developed decades or more down the road. Along with creating new knowledge, universities use their research activities to educate students who will become the next generation's scientists, engineers, teachers, and leaders in government and industry. This fusion of education and cutting-edge research has been a unique feature of the U.S. university research system. The traditional European research model, for example, focuses research in special institutes that are not part of universities. The success of the U.S. model has made the nation's universities the envy of the world, and the model is now widely emulated. This paper answers the following questions: (1) How is U.S. R&D organized and funded?; (2) Where does university research fit in?; and (3) Who funds university research? A list of six largest university research grantors is also presented.