Despite HUD’s endorsement of transitional housing as an essential part of a comprehensive continuum of care, consumers, providers, and advocates have frequently disagreed on its value, on the best ways of linking services to housing, and on appropriate mechanisms and sources for funding transitional housing programs. Critics have emphasized the stigma associated with transitional programs as well as the diversion of resources that might otherwise serve to expand the supply of and access to affordable permanent housing; proponents counter that homeless families and individuals with multiple problems need help with more than housing alone if they are to achieve residential stability. To sort through the conflicting claims about transitional housing requires some consideration of the diversity of the programs thus labeled and what we do and don’t know about their impact on homelessness. We begin by clarifying what the concept encompasses; review the evolution of transitional housing; and describe variations in the major approaches developed for homeless families and individuals in terms of differences in target populations, physical structures, service intensity, and other program characteristics that cluster along a continuum with "high demand" service-intensive facilities at one end and "low demand" programs with flexible requirements and optional services at the other. Available research assessing the major models indicates that scattered-site transitional housing programs that convert to permanent housing constitute one effective (and cost effective) approach to helping families and possibly individuals exist from homelessness. Future research should not only test the relative effectiveness of different transitional program models but should compare transitional housing approaches to alternative strategies for ending homelessness for individuals and families.