Background: Deinstitutionalisation of services for people with intellectual disabilities has become a focus of disability policy in many countries. Research for the most part supports this strategy. However, outcomes are not uniformly better for everyone who moves to community living. This paper explores reasons for variability in service quality and highlights important lessons for countries starting to modernise services. Method: The effects of deinstitutionalisation are summarised and emerging problems identified. The changing context of different welfare-state models and paradigms in disability and public administration are outlined. Results: The main changes which have impacted on the implementation of deinstitutionalisation include: the rise of market-based approaches to service provision, arrangements for rationing services, the "de-differentiation" of intellectual disability services, and the rise of a rights-based model in disability policy. Conclusions: The paper sets out priorities for the future development of community services. Success is likely to require a renewed focus on demonstrating improvement in the quality of life of people with intellectual disabilities and a change in the role of staff to provide more facilitative, enabling support of individuals, especially those with the most severe or complex disabilities. (Contains 1 note and 7 figures.)