Over the past two decades, the foster care system experienced an unprecedented rise in the number of children in out-of-home care, significant changes in the policy framework guiding foster care practice, and ongoing organizational impediments that complicate efforts to serve the children in foster care. This article discusses the current status of the foster care system and finds: Agencies often have difficulty providing adequate, accessible, and appropriate services for the families in their care. Children of color, particularly African-American children, are disproportionately represented in foster care, a situation which raises questions about the equity of the foster care system and threatens the developmental progress of children of color. Foster families can find the experience overwhelming and frustrating, causing many to leave foster parenting within their first year. Organizational problems such as large caseloads, high staff turnover, and data limitations compromise efforts to adequately serve and monitor families. The challenges before the foster care system are numerous, however the authors believe promising policies and practices aimed at strengthening families, supporting case workers, providing timely and adequate data, and infusing cultural competency throughout the system, can move the foster care system forward in the coming years. (Contains 79 endnotes and 2 figures.)