This study assessed the impact of managed care on publicly funded adolescent substance abuse treatment by comparing differences in service utilization and outcomes across prospective samples from two states: Oregon, which uses managed care practices in service financing and delivery, and Washington, which does not. One hundred and six adolescents from Washington and 94 from Oregon, who entered outpatient substance abuse treatment in 1998 and 1999, completed self-report surveys about their substance use before and after receiving treatment (follow-up rate = 75 percent). In addition, clinical chart reviews conducted at the 6-month follow-up assessed the type and amount of treatment these adolescents received during the study period. It was found that service utilization and treatment outcomes were comparable across the two state samples. The evidence presented here suggests that managed care is capable of delivering substance abuse treatment services of comparable quality to state-administered substance abuse treatment services.