State Medicaid programs are playing an increasingly important role in the U.S. health care system and represent a major expenditure as well as a major source of revenue for state budgets. The size and complexity of these programs will only increase with the implementation of the Patient Protection and Affordable Care Act. Yet, many state Medicaid programs lack the resources and breadth of expertise to maximize the value of their programs not only for their beneficiaries but also for all those served by the health care system.Universities, especially those with medical schools and other health science programs, can serve as valuable partners in helping state Medicaid programs achieve higher levels of performance, including designing and implementing new approaches for monitoring the effectiveness and outcomes of health services and developing and sharing knowledge about program outcomes. In turn, universities can expand their role in public policy decision making while taking advantage of opportunities for additional research, training, and funding. As of 2013, approximately a dozen universities have developed formal agreements to provide faculty and care delivery resources to support their state Medicaid programs. These examples offer a road map for how others might approach developing similar, mutually beneficial partnerships.