The next step in welfare to work policy must include addressing the needs of particular places and populations based on what has been learned since welfare reform legislation was enacted in 1996. One of the important lessons learned is that transitional jobs arean especially promising policy response to the needs of hard-pressed urban and rural communities, and unemployed people facing barriers to work. Transitional jobs are wage paying, community service jobs for welfare recipients and other unemployed adults who have not been hired after a job search in the regular labor market. The jobs provide experience and employer references that improve chances of success in the job market and enable families to avoid destitution when welfare benefits end. While some policymakers have argued that working in a transitional job is no different from unpaid workfare, research shows that transitional job participants have better earnings and employment outcomes. Certainly, transitional jobs are more expensive because they include work supports, supervision and some training. The participants’ success, however, demonstrates the value of additional investment in targeted populations.