A comparison of the rate at which recycled water projects have been adopted in two U.S. states, California and Florida, suggests that differences in the nature of interagency relationships significantly influence the speed and frequency with which reuse projects are implemented. These interagency relationships include dealings between producers, distributors and customers of both recycled and potable water, as well as the regulation of reuse by various supervisory bodies. A statistical analysis of California reuse projects indicates that those involving the fewest number of agencies are most readily implemented, i.e. the more complex the institutional arrangements, the longer it takes for projects to be implemented, and the greater the likelihood that they will be postponed or rejected. Surveys of the progress of reuse in the two states suggests that when rulemakers communicate regularly with reuse agencies, develop guidelines that emphasize the value of recycled water and standardize the application of rules through systematic permitting, projects can be rapidly implemented as measured by the volume of water reclaimed and reused. By contrast, when regulators maintain a more neutral position with respect to reuse and develop regulations that emphasize the wastewater origin of the product there is a correspondingly slower rate of project implementation. One possible explanation for this is that although the "hands-off" approach may ensure objectivity on the part of the regulators, it may also impart the message that the agencies charged with the responsibility of distributing recycled water are not trustworthy, or that the water is not safe. As a tentative conclusion, it would appear that states that require reuse of a target amount of recycled water within a short time frame might consider adopting a regulatory approach similar in some respects to that now used in Florida, where standardized permits are issued by a single state agency, significant state funding is available to defray the cost of reuse and simple institutional arrangements are developed wherever possible in lieu of more complex multi-party agreements. Includes 16 references, table, figures.