The budget for the U.S. Department of Labor for Fiscal Year 2010 includes a total of $45 million to support and study transitional jobs. This paper describes the origins of the transitional jobs models that are operating today, reviews the evidence on the effectiveness of this approach and other subsidized employment models, and offers some suggestions regarding the next steps for program design and research. The paper was produced for the U.S. Department of Health and Human Services by MDRC as part of the Enhanced Services for the Hard-to-Employ project, which includes two random assignment evaluations of transitional jobs programs. Transitional jobs programs provide temporary, wage-paying jobs, support services, and job placement help to individuals who have difficulty getting and holding jobs in the regular labor market. Although recent evaluation results have raised doubts about whether TJ programs, as currently designed, are an effective way to improve participants' long-term employment prospects, the studies have also confirmed that TJ programs can be operated at scale, can create useful work opportunities for very disadvantaged people, and can lead to critical indirect impacts such as reducing recidivism among former prisoners. Thus, in drawing lessons from the recent results, the paper argues that it may be important to think more broadly about the goals of TJ programs while simultaneously testing new strategies that may produce better long-term employment outcomes. (Contains 73 footnotes, 4 tables, 4 figures, and 1 box.) [This paper was prepared for the Administration for Children and Families (ACF) and the Office of the Assistant Secretary for Planning and Evaluation (ASPE) in the U.S. Department of Health and Human Services, as part of the Enhanced Services for the Hard-to-Employ Demonstration and Evaluation Project.]