The paper reviews the legal basis for interagency collaboration in providing services to the handicapped, notes the rationale for such an approach, and examines the obstacles encountered in an interagency intervention project for emotionally disturbed children and adolescents. The Cheltenham Project, an interdisciplinary approach featuring a psychoeducational residential treatment center, is described. Among the obstacles encountered in the development of the Cheltenham Project were the location and operation of the physical plant, funding logistics and vacillating budgets within contributing agencies, conflicting legal mandates and agency procedures, turf protection, and politics. The difficulties in resolving conflicts for the program are highlighted, as is the need for data available to support the interagency approach. (CL)