Normalization has gained wide acceptance as a goal that residential institutations for the mentally retarded should strive to achieve, but many organizations have been shown to have difficulty achieving the goal. Theories developed from the organizational contingency perspective suggest that organizations with bureaucratic structures will have particular difficulty accomplishing the nonroutine tasks associated with normalization. Our major purpose was to test the usefulness of such theories for the evaluation of mental retardation facilities by ascertaining whether a less bureaucratic organization for the mentally retarded would achieve greater success than a more bureaucratic organization. The closing of a large public hospital and the subsequent transfer of most of its residents to two new facilities (one of which was more bureaucratic than the other) allowed us to examine bureaucracy's effect on treatment. As predicated, the analysis showed that the less bureaucratic organization produced a greater average positive change in behavior than did the more bureaucratic organization. A number of clinical and demographic characteristics of the residents which could have influenced the observed changes in behavioral level were identified and controlled. They were not found to explain the differences between facilties. Other factors, which could not be controlled in this study, provide suggestions for future research.