The Commission for Health Improvement was launched in November 1999 as the monitor in the National Health Service. It will be wound up in April 2004, when its responsibilities will be passed to the Commission for Healthcare Audit and Inspection (CHAI). This three year study analyses CHI's methodology, activities and impact. The aim was to use CHI's experience to illuminate the challenges and dilemmas of inspection in the NHS and the focus was on reviews of acute trusts. It concludes that CHI is an example of successful institution-building, and that its replacement by CHAI should be seen as policy adaptation. Its problems with methodology largely reflect the fact that it has to work within the framework of clinical governance. CHAI's remit to look at the quality of care rather than clinical governance as such represents a rebalancing of the regulatory task, which will give the new body greater freedom to develop its strategy and methods. [SMD]