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In 1989, Hermann Hospital and University of Texas-Houston Health Science Center School of Nursing applied for and received approval to implement a 5-year demonstration project funded by the Health Care Finance Administration using Medicaid pass-through funds to educate nurses at the graduate level. The project aimed to evaluate the impact of advanced practice nurses and researchers on the practice of professional nursing at a 655-bed acute-care hospital in a large metropolitan area. The authors describe the factors that served to galvanize the two institutions to apply for such a grant, discuss the barriers encountered along the course of the project, and list the outcomes achieved by 1994 or project end. Predictions regarding the second 5-year segment (phase 2) are summarized as well. The article includes suggestions to other institutions interested in replicating such a project.