This study examined individual and system characteristics associated with retention in methadone maintenance treatment among Medicaid-eligible adults in treatment for opiate use in Oregon and Washington. Logistic regression was used to examine the contributions of predisposing, need, and enabling characteristics on 365 day retention in methadone maintenance treatment. Older patients, patients with a history of methadone maintenance treatment, and persons with stable Medicaid eligibility had higher rates of retention than did patients with disabilities, polysubstance users, and those with an arrest record. In Oregon, which delivers methadone maintenance treatment through managed care, retention rose sharply from 28% to 51% between 1994 and 1998 and then leveled off. During the same time period, retention in Washington State grew from 28% to 34%. The higher rates of retention in Oregon , in part, can be explained by differences in service delivery influenced by financing. Faced with long waiting lists, Washington providers were more than twice as likely to administratively discharge patients for rule violations as their Oregon counterparts. Given the importance of retention, policies and practices that influence retention should be carefully considered. Because Medicaid eligibility has a dramatic impact on retention, policies that help extend eligibility or stabilize eligibility among individuals actively engaged in treatment should be carefully considered.