This study compared the quality of child care programs serving children receiving government subsidies to those not serving such children. Thirty-four classrooms in full day programs serving preschool aged children (19 subsidized, 15 unsubsidized) were observed using the Early Childhood Environment Rating Scales-Revised (ECERS-R). (1) Research Findings: One way ANOVA indicated that programs not serving children receiving subsidies were rated higher on overall quality, language and reasoning, learning activities, and social interactions. Teacher salary was significantly correlated with overall quality, and after controlling for teacher salary, subsidy density did not uniquely predict variance in overall quality. (2) Policy Implications: Overall low quality indicates a need for a quality improvement initiative using proven methods. Minimum guidelines for quality beyond state licensing standards should be used to ensure that children in subsidized programs are receiving adequate care and to oversee state and federal investments in early childhood education. (author abstract)