The creation of the University of California, Merced, raised a series of questions: What would ensure that the tenth campus would take its place with the other nine University of California campuses as a center of educational and research distinction? What would make the campus stand out as a modern research university? What would make it unique and distinctive? What would ensure success in meeting expectations for attracting and graduating students, especially the many educationally at-risk, low-income, ethnically diverse students from the San Joaquin Valley? Underlying all these questions was the critical issue of figuring out how a new research university could be funded in an era when state support for higher education was dropping across the nation. This issue of New Directions for Higher Education tells the story. This is the 139th issue of the Jossey Bass quarterly report series New Directions for Higher Education.