The Toyota Production System (TPS) has become a successful model for improving efficiency and eliminating errors in manufacturing processes. In an effort to provide patients and families with the highest quality clinical care, our academic children's hospital has modified the techniques of the TPS for a program in continuous performance improvement (CPI) and has expanded its application to educational and research programs. Over a period of years, physicians, nurses, residents, administrators, and hospital staff have become actively engaged in a culture of continuous performance improvement. This article provides background into the methods of CPI and describes examples of how we have applied these methods for improvement in clinical care, resident teaching, and research administration.