This paper discusses the programmatic concerns, the evaluation, and the ultimate decisions which led to the transfer of CIS (Chemical Information System) to the private sector. CIS is a complex, integrated system of some 20 chemical databases and data analysis programs which provide access to physical, toxicological, environmental effects, and regulatory data on approximately 350,000 chemicals. Originating at the National Institutes of Health in the early 1970's, CIS was transferred to the U.S. Environmental Protection Agency (EPA) in 1973. Subsequently, EPA was responsible for the coordination of the system's activities, the letting of contracts, and the provision of several databases to the system. Both the problems in funding and management associated with EPA control, and the actions taken by EPA which eventually led to the transfer of the system to the private sector, are discussed. These actions included: (1) addressing problems associated with management issues under the present contract; (2) a major information management review of all aspects of the system and an internal management review; (3) establishment of two review panels to provide objective evaluations of the system and its framework; and (4) a report from the review panels. The panels found that existing CIS capabilities were inadequate to meet demands for chemical information, and recommended a more appropriate management concept--a separate government management role from a private sector implementation role. The report concludes with information on how the transfer of CIS to the private sector was accomplished, and a discussion of the changing conditions that made such a transfer necessary. (JB)