The community daycare programs currently under way in several Latin American countries seek to promote human capital formation while relieving one of the most pressing constraints faced by working parents, especially mothers—access to reliable and affordable childcare. This research report presents the results of an evaluation of Guatemala’s Community Day Care program, which offers poor families a package of services to promote child nutrition, socialization, and development, under the condition that parents engage in income-generating activities outside the home. The program was created in the early 1990s as a response to the changing needs of the growing urban population. Given Guatemala’s rising rates of urbanization, the growing importance of formal sector employment, families’ increased distance from relatives who could help with childrearing, and the rising incidence of female-headed households, working mothers were increasingly forced to turn to nonrelative childcare to participate in the labor force. Initially targeting urban populations, the Guatemala program later expanded to all 22 departments of the country and to both urban and rural areas. IFPRI’s evaluation of the program focused on one area of Guatemala City. Designed in collaboration with the program’s administration, the evaluation assessed the program’s operational performance and impact. The results of the operational evaluation, which assessed the quality of implementation and service delivery, became available in early 2000, just as a new administration took over the program. IFPRI’s findings thus fed directly into the new administration’s plans to strengthen the program, and the recommendations to improve the quality of the psycho-pedagogical activities and establish stronger links with the health system were adopted. IFPRI’s impact evaluation showed that the program significantly improved children’s diets, especially their intake of vitamin A, iron, and zinc—essential micronutrients for physical and cognitive development and for protection from infectious diseases. The evaluation also suggested that, at least in Guatemala City, the program contributed to poverty alleviation by reducing childcare constraints and facilitating poor parents’ access to formal sector jobs that offer stability and employment benefits. This was especially true for women who were the sole breadwinners for their households—a particularly vulnerable group. The Guatemala Community Day Care program owes some of its success to its solid grounding in local realities. Programs like this, which address two mutually reinforcing objectives— in this case, ensuring adequate care of young children and allowing parents to work outside the home—have great potential for positive impact in urban areas.