As the electronic data generated by health systems improves, health care executives are beginning to ask whether they should build an internal research function in their organization, and if they do, how they can ensure both academic excellence and that the research is relevant to the strategic interests of their organization. This report documents the experience of three health systems that have been successful in building health services research (HSR) programs: Palo Alto Medical Foundation (PAMF), Geisinger Health System, and Denver Health. Specifically, it explores their rationales for creating an internal HSR unit, the levels of resources dedicated to it, and the research priority setting process used to decide what topics to address.