The status of pharmaceutical services in the Department of Veterans Affairs (VA) is described. The VA health care system is transforming itself from a hospital-based organization into 22 health care networks that emphasize primary and ambulatory care. The impact on VA pharmacy has been substantial. Roles of VA pharmacists and technicians have been enhanced, and a clinical career ladder for pharmacists was created. VA pharmacy officials and leaders from the University of Tennessee College of Pharmacy have been partnering since 1988 in strategic planning to determine how VA pharmacy can do business and serve patients better. Areas targeted for implementation or improvement include staff development, prescribing authority for pharmacists, automation, the physical design of VA pharmacies, residency programs, and a pharmacy benefit management (PBM) product line. The VA PBM is working to enhance the appropriate use of pharmaceuticals in the veteran population, reduce overall health care expenditures, and provide a more consistent quality of care. Specific PBM programs involve the implementation of drug treatment guidelines, a national formulary, and national contracts. There are plans for pharmacoepidemiologic and pharmacoeconomic research in the geriatric veteran population. The VA health care system and its pharmacy service are changing in ways intended to bring about easier access to care, higher quality, and increased responsiveness to patients' needs.