In 1977, the American Psychological Association (APA) entered into a contract with the Civilian Health and Medical Program oj the Uniformed Services (CHAMPUS) to provide peer review oj psychological services as a mechanism oj'quality assurance. The peer review system is now fully operational and has been expanded to a number of private insurance earners. The history of the project, the operational details oj the system, and some of the criticisms that have been raised are described. Research has been performed that reflects on the system, particularly as to the theoretical orientation of the reviewer. This research is summarized, and areas of future research concern are outlined. Finally, the implications of a peer review system for the provider, the patient, and the profession are described.