Despite the promise of psychiatric rehabilitation, many programs fail to incorporate innovative rehabilitation practices into their day-to-day regimens. Performance improvement is an effective paradigm for helping agencies improve the quality of their programs. Four phases of performance improvement are reviewed in this article: organizing for change, preparing the environment, focusing the environment, and maintaining improvement. Implementing the four phases of performance improvement is illustrated in a case study. Methodological rigor of data generated by performance improvement teams is also discussed.