This article documents the impact of the 1996 federal welfare legislation on American Indian families in the state of Arizona over a period of four years. The authors analyzed primary data obtained from interviews with 445 former or current welfare families with children from three Indian reservations: Navajo, San Carlos, and Salt River. Compared with national and regional levels, reservations experienced a slower rate of decline in welfare caseloads. Welfare recipients on reservations had lower levels of education than the national welfare population and lived in areas with a shortage of employment opportunities and support services. The article underscores the importance of job creation, job preparation, and support services for welfare recipients on reservations and the need for federal, state, and tribal governments to work together to help families exit welfare. Policy implications are discussed.