The authors present the first nationally representative data on managed care penetration in the outpatient substance abuse treatment (OSAT) sector. Thirty-eight percent of all OSAT units were involved in some form of managed care in 1995, with 22 percent of their client base covered by managed care. There is also variation in managed care penetration and activity across different types of treatment units. Private for-profit units are involved in managed care to a greater extent than are public and private, not-for-profit organizations. Units affiliated with a hospital have greater participation and penetration than other units. Smaller OSAT facilities have a disproportionately large percentage of their client base in managed care arrangements. Finally, private managed care arrangements are more prevalent, more evenly distributed across organizational types, and represented in larger numbers than are public sources of managed care.