The evidence presented in this paper questions whether the current U.S. Department of Defense (DoD) system of in-kind subsidies for child care is meeting DoD recruitment, readiness, and retention goals or service member needs in an optimal way. DoD appears to be reaping limited benefits from the substantial subsidies provided to families that use Child Development Centers. Many families cannot or choose not to use the subsidized on-base DoD programs; these families receive no support for child care costs. The authors' findings suggest that the DoD child care system could change in a number of ways to better meet DoD and family needs. First, it could redistribute resources within the current system. Rethinking priority policies from the perspective of both child care need and the degree to which care characteristics fit with likely DoD and service member needs would be another important way to change the system. DoD may also wish to expand the child care benefit to cover more military families and a broader set of child care needs. Alternatively, DoD could expand access to child care through the use of cash benefits, vouchers, and/or negotiated discounts with local providers that meet quality standards, while continuing to provide some amount of DoD Family Child Care homes and Child Development Center care. DoD may also want to invest more resources in assessing the value of child care benefits, as it does for other military compensation components. (Contains 17 footnotes, 8 figures and 3 tables.) [For associated summary, see ED502782.]