This report describes the implementation of California's Work Opportunity and Responsibility to Kids (CalWORKs) program in its first two years. According to the CalWORKs welfare-to-work model, immediately following the approval of the aid application, nearly all recipients search for jobs in the context of Job Clubs. For those who do not find employment through job search, an intensive assessment and a sequence of activities follow, to identify and overcome barriers to employment. Implementation in most counties is proceeding more slowly than some observers had hoped, but about as fast as could realistically be expected. County welfare districts (CWDs) face the dual challenge of expanding their capacity to deal with the new, higher, steady-state workload that CalWORKs entails and handling the much larger one-time surge of old cases as they move through the system. Providing mandated support services--child care and transportation; education and training; and treatment for alcohol and substance abuse, mental health, and domestic abuse--has been a challenge for most CWDs. To cope with this expanded workload, they have made different capacity-building decisions. The slow pace of movement through the system is worrisome, however, given the five-year lifetime limit that aid recipients face. Finally, those who have found jobs often do not earn enough to move them completely off aid and toward self-sufficiency. Additional post-employment services appear to be needed.. (MP)