The preparation of pediatric residents to function optimally in managed care environments challenges educators to create a new set of educational objectives and competencies and to incorporate these into curricula that are already full. Many of the skills needed to practice managed care are those that have been required for the practice of pediatrics in any setting. Nevertheless, the emergence of managed care requires the identification of new knowledge to be acquired and new skills and attitudes to be incorporated into daily practice. These competencies can be identified most thoroughly through collaboration among physicians, educators, and leaders of managed care organizations. This joint effort should also serve to establish a foundation on which collaborative, mutually beneficial learning environments can be created. The development of curricula that provide the opportunities needed to attain managed care proficiencies requires an individualized approach for each program that takes into account the degree of managed care penetration in each training environment. Programs in which a managed care approach to patient care predominates will be able to promote most easily their trainees' incorporation of these principles into routine practice. Those with less regular exposure will be forced either to promote managed care principles in an environment in which they may not be accepted or practiced, or to join in partnership with managed care organizations (MCOs) to train residents. Regardless of the setting, evaluation methodologies must be developed to ensure that each of the core competencies has been learned, can be applied to clinical situations, and is retained throughout the training period. These efforts require the development of faculty who understand and can model a managed care approach to patient management. The ongoing evolution of managed care systems encourages the development of new, creative strategies to train faculty, who may find themselves learning about this emerging environment at the same time as are their trainees.